A Year of Resilience: Reflecting on 2023’s Economic and Real Estate Achievements
The narrative of 2023 within Malaysia’s economic and real estate realms is one of steadfast resilience. Knight Frank Malaysia, a beacon in the global real estate consultancy sphere, forecasts a landscape of stability and cautious optimism for the commercial real estate sector as we venture into 2024. This outlook is anchored in the robust performance witnessed throughout the past year, characterized by a buoyant real estate market that saw a notable uptick in transactions and value.
Delving into the Malaysia Commercial Real Estate Investment Sentiment Survey (CREISS) for 2024
The CREISS 2024, courtesy of Knight Frank Malaysia, offers a meticulous examination of the commercial real estate market, pooling insights from the industry’s vanguards. The survey radiates a positive sentiment, buoyed by a surge in demand across specific sub-sectors and a general confidence in the economic landscape.
Keith Ooi, Group Managing Director of Knight Frank Malaysia, captured the essence of 2023’s triumphs, stating, “2023 showcased a resilient performance for both the economy and the real estate market, setting the stage for a stable and cautiously optimistic outlook in 2024. The surge in demand for data centers in the APAC region, coupled with growing interest in alternative investments such as serviced residences and industrial parks, underpins the resurgence of the commercial real estate market post-pandemic.”
Investment Sentiment Influencers
The survey sheds light on a prevailing optimism towards foreign direct investments (FDI), with 68% of participants anticipating more favorable conditions, especially within the manufacturing sector. The Business Confidence Index (BCI) and government policies, including Budget 2024, are also identified as pivotal factors, influencing the commercial property market’s trajectory.
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2024’s Investment Landscape and Sectoral Forecasts
Amy Wong, Executive Director of Research & Consultancy at Knight Frank Malaysia, highlighted an expected uptick in investments targeting the retail, healthcare, and educational/institutional sub-sectors. On the flip side, the office and industrial/logistics sectors might see minimal interest, with the hotel/leisure sector continuing its current trajectory.
Looking ahead from 2024 to 2026, there’s a marked interest in serviced residences/hotels and industrial/business parks, signaling a shift towards alternative investments that mirror changing work preferences and technological progress.
Anticipations for 2024’s Market Performance
The CREISS report projects a sunny forecast for the industrial and logistics sectors, with capital appreciation and yields expected to climb. However, the office sector might face headwinds, with potential dips in capital value and yields for older assets. Despite these challenges, the industrial/logistics and hotel/leisure industries are poised for positive rental value growth, albeit with concerns for the office sector amidst a significant supply influx.
Looking towards 2024, Knight Frank Malaysia’s CREISS report sketches a narrative of cautious optimism for Malaysia’s commercial real estate market. With a foundation of economic resilience and a strategic pivot towards burgeoning sectors and investments, the stage is set for a year of stability and potential growth.
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