KUALA LUMPUR (Jan 7) – Malaysia’s industrial property sector is poised to be the primary growth engine for the country’s real estate market in 2026, according to CBRE | WTW’s Malaysia Real Estate Market Outlook 2026 report.
The report highlights strong demand in higher-value industries, including electrical and electronics, semiconductors, data centres, and technology-related manufacturing. Rising interest in Malaysia’s manufacturing capabilities is driving the need for modern, technology-ready industrial facilities. This trend is expected to shape investment patterns across key industrial hubs in Selangor and Kuala Lumpur, including Subang area, Puchong, and Bukit Jalil.
Johor continues to lead in approved industrial investments, recording RM91.1 billion in the third quarter of 2025, outpacing Selangor and Kuala Lumpur. Penang maintains a robust industrial scene, with 146 active projects, 78% of which are foreign-backed, while domestic contributions account for 22%. In Sarawak, industrial expansion is centred around Bintulu, with new projects in semiconductor manufacturing, logistics, renewable energy, and aerospace engineering.
Tan Ka Leong, Managing Director of CBRE | WTW Malaysia, noted that real estate investment trusts (REITs) with industrial assets stand to benefit significantly in 2026, particularly when the properties meet modern energy efficiency and environmental standards. “Industrial assets are generally smaller and more diversified compared to retail properties. This reduces concentration risk and ensures more stable returns, even if individual units underperform,” he said.
Unlike retail centres, which depend heavily on consumer spending and turnover-based rents, industrial portfolios offer resilience through multiple smaller assets. Developers are increasingly incorporating ESG (environmental, social, governance) features such as solar panels, water recycling systems, and energy-efficient building solutions, which are now essential to attract premium tenants in Malaysia’s industrial property market.
With demand for factory space in Puchong, industrial land in Selangor, and office space in Bukit Jalil expected to rise, 2026 is shaping up to be a pivotal year for industrial and commercial property investors looking for long-term, sustainable returns in Malaysia’s key economic regions.
Malaysia