Malaysia's Commercial Real Estate Transactions On The Rise, Mirroring Global Trend - Knight Frank

KUALA LUMPUR, March 5 (Bernama) -- Malaysia has seen an uptick in commercial real estate (CRE) transactions, driven by high-net-worth individuals (HNWIs) and institutional investors seeking long-term value, mirroring the global trend, said Knight Frank Malaysia.

In a statement following the release of the Wealth Report 2024, Knight Frank’s flagship publication, the firm noted that this recovery aligns with the rise in Malaysia’s HNWI population, reflecting growing wealth accumulation and investment interest.

According to the report, global CRE investment rebounded strongly in 2024, rising to US$806 billion, marking an eight per cent year-on-year (y-o-y) increase after a sharp 43 per cent contraction in 2023, signalling renewed investor confidence. 

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The firm highlighted that cross-border capital flows also gained momentum, increasing by 12 per cent to US$171 billion, underscoring a global appetite for real estate investments.

Private capital continued to dominate the CRE market in 2024, with institutional investors deploying US$268 billion, representing 33 per cent of total investments, with public market investors also seeing the highest y-o-y increase, posting a 22 per cent rise in investment volumes.

"In Malaysia, private investors have been particularly active in the office and industrial sectors, capitalising on strong demand for high-quality assets. 

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"The industrial sector led global investment, securing US$216 billion, while the living sector followed closely at US$205 billion. Office investment reached US$173 billion, signalling a recovery in confidence in workplace assets," Knight Frank Malaysia said. 

Group managing director Keith Ooi said Malaysia’s commercial real estate market continued to evolve, with investors showing strong interest in prime office and logistics assets. 

As economic conditions stabilise and financing costs ease, he expects a wave of strategic acquisitions, particularly in key urban centres such as Kuala Lumpur, Penang, and Johor Bahru.

"Investors are increasingly seeking long-term value, and the resurgence of private capital plays a crucial role in this recovery," said Ooi. 

Elaborating on HNWIs, Knight Frank Malaysia said the number of HNWIs worldwide grew by 4.4 per cent in 2024, reaching 2.34 million individuals. 

North America led this expansion with a 5.2 per cent increase, followed by Asia at 5.0 per cent, Africa at 4.7 per cent, and Australasia at 3.9 per cent. 

The Middle East (2.7 per cent), Latin America (1.5 per cent), and Europe (1.4 per cent) also saw gains.

“Malaysia has been a key beneficiary of this wealth growth, with an increasing number of ultra-wealthy individuals diversifying their portfolios into real estate. 

"The country remains an attractive destination for high-value property investments, particularly in the luxury residential and prime commercial segments," it said. 

Additionally, it shared that international investor interest remained strong, particularly in Kuala Lumpur’s prime office and hospitality sectors, with a significant pool of capital ready for deployment, positioning 2025 as a turning point for the country’s real estate market.

The firm added that with Malaysia positioned as a key player in Southeast Asia’s investment landscape, both domestic and international investors are expected to capitalise on emerging opportunities, further strengthening the country’s real estate market as a preferred investment destination.

-- BERNAMA