Industrial development within the Johor–Singapore Special Economic Zone (JS-SEZ) has yet to keep pace with increasing demand, as developers remain cautious despite growing interest from manufacturers and logistics players.
Knight Frank Malaysia senior executive director Allan Sim said industrial supply in the SEZ is still limited, even as enquiries continue to rise.
Speaking at the 18th Malaysian Property Summit (18MPS) in Kuala Lumpur, Allan noted that industrial projects in the zone remain relatively scarce, resulting in a clear imbalance between supply and demand.
He stressed that strong manufacturing growth is highly dependent on supporting infrastructure, pointing out that adequate power capacity, reliable water supply, efficient road networks and well-managed ports are essential for industrial viability.
Allan added that Malaysia’s positioning as a regional manufacturing and logistics hub continues to strengthen, supported by global supply chain diversification strategies such as “China plus one” and “Singapore plus one”, with European manufacturers also beginning to adopt similar approaches.
According to him, logistics operators are increasingly shifting towards semi-automated and purpose-built facilities, as older factories no longer meet the requirements of modern tenants.
“Access to ports, transportation costs, production efficiency and proximity to supply chains are key factors that determine whether an industrial investment is viable,” he said.
During the same session, Northmod Pte Ltd investment director Jon Sim said that special economic zone status alone is insufficient to attract investors, as decision-making is ultimately driven by tenant-specific operational needs.
He explained that investors typically evaluate industrial assets based on location, accessibility and infrastructure readiness, particularly proximity to ports and logistics corridors.
Equally important, Jon said, is the role of the master developer in ensuring projects remain viable throughout development and operational stages.
Having a capable master developer and port operator who can deliver additional infrastructure—such as power, water supply or road upgrades—helps reduce execution risks and prevents projects from stalling.
He added that industrial location choices are ultimately shaped by customer demand, with successful developments often built on a deep understanding of tenant requirements and customised solutions rather than generic offerings.
Jon also highlighted that logistics and manufacturing activities evolve at different paces across industrial clusters, citing Penang’s Batu Kawan area as an example where new facilities regularly come onstream to meet staggered manufacturing demand.
Manufacturing projects, he said, are typically rolled out in phases, with each phase taking about 12 to 15 months to become operational. Once production stabilises, supporting logistics and supply chain activities follow.
While Johor’s SEZ continues to develop, the supply-demand imbalance reinforces the continued relevance of established industrial hubs in the Klang Valley. Locations offering ready infrastructure and accessibility—such as industrial land in Selangor, factory developments in Puchong, and industrial property in the Subang area—remain attractive to manufacturers seeking faster execution timelines.
At the same time, demand for commercial property in KL and office space in Bukit Jalil continues to benefit from industrial expansion, as corporate offices, support services and regional headquarters follow manufacturing and logistics growth.
The 18MPS, organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS), brought together approximately 300 industry stakeholders to examine Malaysia’s property outlook for 2026. The summit featured five key sessions, including discussions on shifting investment trends, alternative asset classes and adaptive reuse strategies shaping the future of the property sector.
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