This article first appeared in City & Country, The Edge Malaysia Weekly on June 15, 2026 - June 21, 2026

The Edge Malaysia | CBRE | WTW Industrial Property Monitor for the first quarter of the year covers the Klang Valley industrial sector. Data and insights on Johor and Penang will be included from the second half of the year, providing comprehensive coverage of all three regions.

In 2025, the transaction value of the country’s industrial property market rose 21.3% year on year (y-o-y) to RM33.8 billion, significantly exceeding the modest 1.4% rise in transaction volume to 8,910 units. According to CBRE | WTW group managing director Tan Ka Leong, this divergence indicates a growing preference for higher-value industrial assets, driven by sustained demand from the logistics and advanced manufacturing sectors.

In the Klang Valley, the industrial sector spans about 54,300ha of industrial-zoned land across key districts, with varying levels of development reflecting distinct stages of physical and structural maturity.

Tan explains that this uneven distribution underscores a clear spatial hierarchy in the Klang Valley industrial landscape. While mature core areas are increasingly constrained by limited available land, peripheral districts retain substantial development potential.

Overall, about 59% of this total land bank has been developed, reinforcing the Klang Valley’s dual character as both a mature industrial hub and an evolving growth corridor.

“Against this structurally differentiated land base, the Klang Valley industrial property market continued to expand in 2025, with transaction volume increasing 9% y-o-y to 3,390 transactions and transaction value rising 9% y-o-y to RM15.8 billion,” he says.

The strong momentum seen in the country’s industrial property market in 2025 carried into 1Q2026, with transaction value rising 2.8% y-o-y to RM7.3 billion, despite a 5.6% decline in transaction volume to 1,889 units, reflecting the resilience of premium industrial assets amid cautious investment activity and heightened geopolitical and macroeconomic uncertainty during the quarter in review.

Nevertheless, Tan says national initiatives, such as the New Industrial Master Plan 2030 and the 13th Malaysia Plan, continue to provide support in promoting higher-value industrial development and improving the investment environment.

In the Klang Valley, 1Q2026 data shows a moderation in market activity, with transaction volume declining 13% y-o-y to 668 transactions and transaction value falling 18% y-o-y to RM2.97 billion, owing mainly to overall subdued investment sentiment.

Tan observes that terraced factories remained the dominant asset class during the quarter, driven by their relative affordability and accessibility, which are particularly attractive to small and medium enterprises (SMEs) and young entrepreneurs seeking to capitalise on growth opportunities in the region’s well-established industrial landscape.

“This demand is reflected in the generally upward trend in average transaction prices for 1½-storey terraced factories over the past decade, particularly in Petaling Jaya, Puchong and Subang Jaya. However, selected submarkets, including Klang and Bangi-Kajang-Semenyih, have shown signs of price stabilisation in recent periods, following sustained growth in preceding years,” he says.

The semi-detached factory segment also demonstrated steady expansion across the Klang Valley, supported by demand from established SMEs and owner-occupiers seeking larger and more efficient operational spaces, particularly among logistics-related businesses as well as light industrial and service-oriented users. Tan notes that this is reflected in the general upward trend in capital values over time, underpinned by a preference for lower-density, better-specified industrial assets.

“Across key submarkets, average transaction prices for semi-detached factories have generally trended upwards over the past decade. Prime and mature locations such as Petaling Jaya continued to lead the market, with average transaction prices remaining above RM5 million in 1Q2026, reflecting sustained demand for well-located, high-quality industrial assets. Similar long-term growth trends were observed in Puchong and Subang Jaya, where values have increased progressively in line with improving industrial fundamentals,” he says.

In terms of location, Klang has seen steady growth driven by its expanding logistics and manufacturing base, whereas Bangi-Kajang-Semenyih has benefited from ongoing industrial decentralisation and improving connectivity.

According to Tan, despite earlier fluctuations, both locations remained broadly stable going into 1Q2026, reflecting sustained occupier demand and continued investor interest in more affordable industrial alternatives.

The strong demand has also resulted in higher industrial land prices in these locations, with Klang and Bangi-Kajang-Semenyih recording notable increases and registering 10-year compound annual growth rates (CAGRs) of 4.5% and 6.9% respectively, according to CBRE | WTW data.

In Klang, growth has been supported by its entrenched role as a logistics and port-centric industrial hub, underpinned by Port Klang and improved regional connectivity via the West Coast Expressway, which has strengthened north-south freight movement.

“Meanwhile, Bangi-Kajang-Semenyih has benefited from improved accessibility, particularly following the completion of the MRT Kajang Line and enhanced highway links via LEKAS (Kajang-Seremban Highway) and SILK (Kajang Dispersal Link Expressway), which have improved labour mobility and industrial connectivity,” he says.

There were several key developments during the quarter in review. In February, Binastra Corp Bhd (KL:BNASTRA) secured a RM503 million contract for the proposed development of a data centre in Jalan Sri Permaisuri, Kuala Lumpur, while Bridge Data Centres Malaysia VII Sdn Bhd acquired about 136 acres in IOI Industrial Park in Banting for RM740.7 million.

In the same month, Oriental Coffee International Sdn Bhd purchased a parcel of leasehold industrial land, together with a factory lot in Taman Perindustrian Putra, Puchong, for RM23 million.

In March, WG Malaysia VIII Sdn Bhd acquired adjoining industrial land parcels in Kapar, Klang, for a combined RM687.89 million for a large-scale IT-related development. Meanwhile, Signature Cabinet Sdn Bhd sold leasehold industrial land, comprising a 1-storey detached factory, 3-storey office and 2-storey detached factory in Taman Sains Selangor 1, Kota Damansara, to Boon Koon Capital Sdn Bhd for RM66 million.

Tan observes that industrial property demand is increasingly spilling over into secondary corridors such as Kundang, Banting and Bangi-Kajang-Semenyih, as occupiers seek larger and more affordable development sites.

“This trend is reflected in the growing pipeline of master-planned industrial developments across these emerging locations, including projects such as KLIP Plus in Kundang and Tiara Industrial Park 7 in Kajang. Improving connectivity via major infrastructure networks has further enhanced the attractiveness of these locations by strengthening regional accessibility and industrial connectivity,” he says.

Tan is optimistic about the outlook for the Klang Valley industrial property market, supported by sustained demand from the logistics, digital infrastructure and manufacturing industries, as well as SMEs. Market activity is expected to remain focused on modern, high-specification industrial assets in master-planned industrial parks, as well as purpose-built logistics and build-to-suit facilities.

“Demand continues to be underpinned by structural trends such as e-commerce expansion, supply chain restructuring and the decentralisation of industrial activity into emerging submarkets. An established location like Klang is expected to continue benefiting from its entrenched role as a logistics and port-centric hub, while secondary corridors are gaining traction, supported by improving connectivity and the availability of larger and more competitively priced industrial land,” he says.

At the same time, growing investor interest in data centres and digital infrastructure is contributing to the gradual repositioning of selected industrial corridors towards higher-value and infrastructure-intensive uses.

Continued infrastructure enhancements such as improvements to Port Klang, the West Coast Expressway and the upcoming East Coast Rail Link are expected to further strengthen the Klang Valley’s position as a regional distribution, logistics and digital infrastructure hub, Tan believes.

“Nevertheless, rising construction costs, infrastructure requirements and global geopolitical uncertainties may continue to weigh on near-term expansion plans and development timelines. In response, developers are increasingly adopting phased, pre-committed and build-to-suit development strategies to better align future supply with occupier demand and mitigate development risk,” he says.

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