This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025

MALAYSIA’s property market saw a significant boost in activity in 2024, with more transactions and notable deals concluded compared with the previous year. The value of property transactions in the first half of 2024 (1H2024) was the highest in five years at RM105.65 billion, up 23.8% from RM85.37 billion in 1H2023, according to the National Property Information Centre (Napic).

The first nine months of 2024 saw 311,211 transactions worth RM162.96 billion — an increase of 6% in terms of the number of transactions and a growth of 14% in terms of value compared with the same period a year ago (9M2023: 293,073 transactions worth RM142.51 billion).

There was strong demand for data centres as seen in the numerous deals signed throughout the year, and this is expected to increase even more in 2025.

According to Knight Frank Malaysia’s Data Centre Research Report 2024, Malaysia recorded a significant take-up of 429mw worth RM141.72 billion in the first 10 months of 2024, triple that seen in 2023. The country currently hosts 54 operational data centres with a 504.8mw capacity, with Johor leading in information technology (IT) capacity and the Klang Valley remaining a core market and Sarawak, Negeri Sembilan and Kedah as emerging hubs, the report said.

Apart from that, several infrastructure projects are expected to catalyse economic growth and stimulate the property market next year.

“In 2024, Malaysia’s property market showcased significant growth across multiple sectors, driven by a mix of domestic economic momentum and increasing international investments. Among the more notable developments was Johor’s rise as a prime investment destination, spurred by the nearing completion of the Rapid Transit System (RTS) linking Johor Bahru and Singapore, as well as the establishment of the Johor-Singapore Special Economic Zone (JS-SEZ). These initiatives elevated Johor’s appeal as a regional hub, fostering vibrant activity in key areas such as data centres, industrial real estate, and retail properties,” Zerin Properties founder and group CEO Previn Singhe tells The Edge.

He says demand for data centres has become a significant growth driver nationwide, driven by the increasing adoption of cloud computing and artificial intelligence technologies. Johor, in particular, has emerged as an attractive location for data centre investments due to its proximity to Singapore and cost advantages. This shift is partly influenced by land constraints in Singapore, redirecting attention towards Malaysia.

Laurelcap Sdn Bhd executive director Stanley Toh agrees that the RTS, the data centre boom and the Forest City Special Financial Zone (FCSFZ) have boosted confidence in the market, especially in Johor.

“Interest rates globally have seen a gradual decrease and the strengthening of the ringgit has also spurred confidence in the property market. Visa-free entry for Chinese travellers to Malaysia has also helped the tourism and hospitality industry,” he says.

“The year 2024 had a good start with strong sentiments and promises. But the year did not end easy. Geopolitical tensions continued, such as the US-China trade tensions, the Russia–Ukraine war and the Israel-Palestine conflict, causing worldwide havoc and disruptions in most markets,” Savills Malaysia group managing director Datuk Paul Khong notes.

“[Nevertheless,] in Malaysia, we fared well, with Bank Negara Malaysia holding its overnight policy rate at 3%, the data centre sector and industrial land deals leading the market, and petrol prices stayed down except for diesel prices. The Malaysia My Second Home [MM2H] visa scheme also saw strong traction from China’s wealthy, among others,” he adds.

JLL (Malaysia) managing director Jamie Tan says the local property market in 2024 has made a remarkable recovery, rebounding from the Covid-19 pandemic and achieving transaction levels that surpassed those of 2023 across all segments.

“While robust fundamentals and investor confidence continue to drive growth, the market is, however, increasingly influenced by external factors. Geopolitical tensions and economic uncertainties now have a greater impact on the country’s real estate landscape, reflecting a world where local markets are more interconnected than ever,” he tells The Edge.

As in previous years, The Edge reached out to real estate experts for their list of top 10 property deals in 2024. The year saw notable deals in the land, hospitality and retail segments. Apart from Previn, Khong, Tan and Toh, the other participants were Knight Frank Malaysia group managing director Keith Ooi, CBRE | WTW group managing director Tan Ka Leong, ExaStrata Solutions Sdn Bhd CEO and chief real estate consultant Adzman Shah Mohd Ariffin, and Rahim & Co International Sdn Bhd real estate agency CEO Siva Shanker.

Bandar Malaysia was rated as the year’s top deal by the majority of the consultants. In October, the Ministry of Finance sold the 486-acre piece of prime land in Jalan Sungai Besi, Kuala Lumpur — the site of the former Royal Malaysian Air Force base — to KLCC (Holdings) Sdn Bhd (KLCCH), a unit of national oil and gas company Petroliam Nasional Bhd (Petronas), for a purported RM12 billion.

“KLCCH will undertake the development based on commercial viability over a long-term period. The development is envisioned as an international business hub and a liveable and inclusive city for the community,” KLCCH said in a statement on Dec 23.

Zerin’s Previn says the transaction was undoubtedly the top real estate deal of 2024, marking a pivotal moment in Malaysia’s property market.

“This landmark transaction signifies confidence in the nation’s long-term economic trajectory and urban development. Bandar Malaysia, with its strategic location and immense potential, is poised to become a transformative hub for commerce, transportation and lifestyle. KLCCH’s proven track record in iconic developments further reinforces the credibility and ambition behind this project.

“The acquisition is expected to catalyse substantial economic activity, attract foreign investment and solidify Malaysia’s standing as a regional real estate powerhouse. This deal also sets the stage for the nation’s future, integrating sustainability, smart-city principles, and global connectivity to redefine urban living for decades to come,” he adds.

The deal was also selected by ExaStrata’s Adzman Shah, who believes that the acquisition of Bandar Malaysia by KLCCH will bring in the financial support and development expertise to unlock the potential of the area.

“The future development of Bandar Malaysia will be an exciting one to watch, especially as it has been gaining renewed interest of late. Recent announcements by the Madani government emphasised the inclusion of affordable housing and Malay reserve developments within the project, aligning with broader national goals to address housing accessibility. However, the integration of social housing within a predominantly commercially-driven transit-oriented development is expected to pose significant challenges for architects and urban planners,” JLL’s Tan says. “Balancing economic viability with the principles of inclusivity and social equity will be crucial in ensuring the township meets the diverse needs of its residents as well as public policy.”

Tan says inclusivity will undoubtedly become a central theme in the design discourse, as planners must navigate the complexities of creating a cohesive community that bridges socio-economic divides.

He notes that the success of Bandar Malaysia will hinge on its ability to harmonise affordable housing with high-end commercial and residential spaces while fostering a sense of belonging for all. “Achieving this balance could set a precedent for future urban developments in Malaysia, demonstrating how mixed-use projects can address both market demands and social responsibilities.”

The Bandar Malaysia development is something to watch out for over the next two decades, Savills’ Khong says.

Laurelcap’s Toh says the sale of Bandar Malaysia for a reported RM12 billion is probably the largest single transaction in the country.

“The transaction is significant not just because of the controversy surrounding it but also its prime location and large land mass. It would be interesting to see what KLCCH plans for the land as it will have a massive impact on Kuala Lumpur city and its immediate surrounding area,” he adds.

KLCC Property Holdings Bhd’s (KLCCP) purchase of the remaining 40% equity interest in Suria KLCC from Ocmador (Malaysia) City Retail Centre Sdn Bhd, Port Moresby Investments Ltd and Bold Peak Sdn Bhd for a total of RM1.95 billion also made it to the list of top 10 property deals in 2024. The deal was concluded by JLL. KLCCP and KLCC Real Estate Investment Trust (KLCC REIT) are collectively known as KLCCP Stapled Group (KL:KLCC).

Another notable retail transaction this year was Kuok Group’s Singapore-based Allgreen Properties Ltd buying back the 70% stake in Johor Bahru City Square mall held by Singapore’s GIC Real Estate Pte Ltd for RM850 million. Allgreen had sold the stake to GIC RE two decades ago.

There’s also Tropicana Corp Bhd’s (KL:TROP) sale of Tropicana Gardens Mall and Marriott Courtyard Penang to IOI Properties Group Bhd (KL:IOIPG) at RM680 million and RM165 million respectively. Tropicana Gardens Mall is now known as IOI Mall Damansara.

Rahim & Co’s Siva says IOI Properties appears to be on an acquisition trail, venturing into the retail sector in a big way.

“This may be the precursor to bigger things, probably a real estate investment trust [REIT] exercise,” he reckons.

The market saw numerous data centre transactions this year, including Microsoft Payments (M) Sdn Bhd’s acquisition of two pieces of industrial land in Johor. The company acquired a 123-acre piece of land in Eco Business Park VI in Kulai for RM402.3 million and a 1.1 million sq ft plot in Pulai for RM132.47 million. What’s noteworthy, according to CBRE | WTW’s Tan, is that Microsoft had also purchased 2.62 million sq ft of land near Pulai in November 2023.

The 20-year data centre lease deal worth RM5.6 million by Sime Darby Property Bhd (KL:SIMEPROP) with Pearl Computing Malaysia Sdn Bhd, a wholly-owned unit of Singapore based Raiden APAC Pte Ltd, was also selected by the property experts. The lease starts in 2027. This is in addition to the estimated RM2 billion deal signed in May by both parties. Sime Darby Property is currently developing these data centre facilities on its 77-acre site in Elmina Business Park in Sungai Buloh, KL, which it describes as Klang Valley’s largest freehold industrial business hub.

Another notable data centre-related transaction is Sunway Bhd’s (KL:SUNWAY) 64-acre tract in Sunway City Iskandar Puteri, Johor, to Equalbase Pte Ltd for RM380 million.

Bridge Data Centres Malaysia IV Sdn Bhd also bought RM337.3 million worth of land in the state from Johor-based developer Paragon Globe Bhd (KL:PGLOBE) in two separate deals, CBRE | WTW’s Tan notes. The first was for 47.86 acres while the second was for 19.76 acres, both in Plentong.

“The industrial sector also recorded strong momentum in 2024, supported by foreign direct investments and the expansion of local businesses. High-tech industrial parks, manufacturing facilities and warehouses remained attractive to investors, bolstered by Malaysia’s strategic geographical position and robust infrastructure network,” Previn says.

BRDB Developments Sdn Bhd’s acquisition of nine acres along Jalan Semantan, KL — formerly Wisma Damansara land — from Selangor Properties Sdn Bhd in October made it to several of the property experts’ top 10 lists.

Laurelcap’s Toh chose the deal because the asset is “an iconic building which has been left vacant for several years”. He says that the redevelopment of the prominent building coupled with Pavilion Damansara nearby will change the landscape of Jalan Semantan in the near future. Knight Frank brokered the deal.

Another significant land deal was Tan Sri Syed Mokhtar Al-Bukhary-linked company Senibong Island Sdn Bhd’s purchase of a 960-acre land in Tebrau, Johor, for RM564 million from S P Setia Bhd (KL:SPSETIA)  in June.

ExaStrata’s Adzman Shah highlights Radium Development Bhd’s (KL:RADIUM) purchase of a 13-acre parcel in Cheras, KL, from Dupion Development Sdn Bhd for RM458 million — a record price for a piece of land with a lease that will expire in July 2113.

REITs were also active during the year. For one, the sale of 163 Retail Park in Mont’Kiara, KL, with a net lettable area of 255,535 sq ft, to Sunway REIT (KL:SUNREIT) for RM215 million. It is now known as Sunway 163 Mall. Toh considers the move to be positive as the asset is 99% occupied with more than 100 tenants and brands that offer a variety of retail options.

In fact, Previn believes that this particular deal started the ball rolling for retail property deals in 2024.

CBRE | WTW’s Tan points out that Sunway REIT had also acquired Kluang Mall in August for RM158 million. The mall offers 6.8% net property income yield, reinforcing Sunway REIT’s presence in high-growth retail markets.

KIP REIT’s (KL:KIPREIT) acquisition of DPulze Shopping Centre in Cyberjaya, Selangor, for RM320 million was a common pick for top 10 deals of the year. Rahim & Co’s Siva says KIP REIT seems to be on a buying spree and its aggressive acquisitions bode well for the strong and steady growth of the trust.

Axis REIT’s (KL:AXREIT) sale of its 60-acre industrial complex in the Bukit Raja industrial area in Klang, Selangor, to Amsteel Mills Sdn Bhd for RM313 million and Axis Steel Centre @ SiLC in Iskandar Malaysia, Johor, for RM162 million, made it to the list. Axis REIT had also acquired a 67-acre industrial complex and storage yard in Klang for RM351.8 million.

Among other notable deals were the sale of 16 storeys within Tower 2 (Menara B) — comprising 14 storeys of luxury hotel rooms and two storeys of hotel facilities — in Oxley Towers KLCC.

Knight Frank’s Ooi says this is a landmark entry, denoting Langham Hotel’s presence in the Malaysian market. He adds that Langham Hospitality Group paid RM250 million (or RM1.26 million per key) for a 198-room hotel with stunning views of the cityscape, scheduled to open in 2027.

CBRE | WTW’s Tan says Malaysia’s property market is set for steady growth in 2025, driven by favourable economic conditions, government initiatives and infrastructure improvements. The Klang Valley is poised for increased industrial activity, particularly in warehousing and logistics, while Seberang Perai and Kulim in the northern region are emerging as hotspots for industrial investments due to their strategic locations and supportive infrastructure.

ExaStrata’s Adzman Shah says Malaysia has a bright outlook as it is expected to benefit from foreign direct investments, especially from both the US and China. “With the JS-SEZ, growth of data centres and RTS, Johor looks to be gearing up for rapid development. The Singapore factor will continue to encourage development in Johor Bahru to cater to the spillover of business activities. Penang also seems promising with the Mutiara Line mass rapid transit [MRT] being planned on the island, which will spur further developments.

“The property market will continue to be active, especially in development activities related to manufacturing and IT-related sectors. However, the government needs to review the MM2H requirements in order to encourage more investors,” he adds.

Knight Frank’s Ooi adds that the manufacturing sector, particularly semiconductors, is poised for significant growth in both established and growing manufacturing and industrial ecosystems including Kulim, Kedah; Penang and Greater Kuala Lumpur.

Siva expects 2025 to continue its upward rally, although growth may be moderate.

“The Klang Valley will continue to see a hive of activity in terms of pocket land developments. The industrial segment will continue its steady growth, with the increase of online marketing activities expected for Grade A warehouses expanding,” he says.

“The Kuala Lumpur-Singapore High Speed Rail [HSR] project seems to gain traction again in Johor, with the JS-SZE and free trade zone redesignation of Forest City. New data centres will continue to take form in many locations. The industrial, logistics and manufacturing sectors will enjoy good, strong demand from all sectors. General retail and hospitality sectors are also moving positively and traction has been quite strong especially since the ‘revenge spending’ syndrome has ended. We hope and expect to see more foreign and local tourist spending next year,” Savills’ Khong says.

Previn anticipates more data centre deals originating from North Asia, as well as hospitality deals in the Klang Valley, Johor and Penang.

As for the retail sector, Previn says it is set for steady growth in 2025, particularly in key tourist destinations like Kuala Lumpur, Penang and Johor Bahru.

“The retail sector gained traction in 2024, benefiting from improved consumer spending and the revival of international tourism. Properties with resilient tenant bases and strong yield potential, particularly in well-connected locations, garnered the interest of both local and international investors. The recovery in tourism and consumer spending, along with various government-backed initiatives such as Visit Malaysia 2026, will further drive interest in retail properties.

“The hospitality sector in 2024 experienced a revitalisation, with increased investments in high potential locations. The sector capitalised on a rebound in tourism and leisure activities, driven by Malaysia’s improved travel outlook. This resurgence in visitor numbers restored investor confidence, boosting demand for hospitality assets and reinforcing the sector’s recovery trajectory,” he says.