logistic

MALAYSIA’S logistics and industrial property sector continued to show resilience in the first half of 2025 (1H2025), even as logistics rents across the Asia-Pacific region dipped 0.4% year-on-year — the first decline since the pandemic, according to Knight Frank’s Asia-Pacific Logistics Highlights H1 2025 report.

Knight Frank attributed Malaysia’s stable performance to its strategic trade location, participation in key agreements like RCEP and CPTPP, and government support measures.

These include infrastructure investments, cash aid, fuel subsidies, and a higher minimum wage — all of which are expected to support consumer spending and drive demand for logistics and warehouse space, particularly for fast-moving consumer goods (FMCG).

“Malaysia’s participation in key trade agreements like RCEP and CPTPP has already positioned the country as an attractive destination for exporters and manufacturers, particularly with the benefit of lower intra-regional tariffs,” said Knight Frank Malaysia director of Land & Industrial Solutions Chelwin Soo.

With the recent US decision to reduce reciprocal tariffs from 25% to 19%, warehouses located near ports are also expected to benefit from stronger demand in the second half of the year.

The report highlights that Malaysia continues to benefit from global supply chain diversification strategies, such as “China+1” and “Singapore+1”, as manufacturers look to reduce costs and mitigate geopolitical risk.

“Malaysia’s strategic location, cost competitiveness, and favourable tariff structure — especially when compared to China — make it a logical choice for companies looking to realign their operations across Asia,” said Knight Frank Malaysia senior executive director Allan Sim.

Despite overall occupier caution across the region, Knight Frank noted that the slowdown in rental growth is more a result of strategic repositioning than weakening fundamentals.

Selective demand in Malaysia and emerging Southeast Asian markets remains intact.

Looking ahead, the outlook for Malaysia’s logistics sector remains positive, with Knight Frank encouraging occupiers to secure prime space amid current market conditions to support long-term growth. — TMR