KUALA LUMPUR, Jan 27 (Bernama) -- Contractors in Malaysia should leverage more on the industrial property segment, which has remained resilient post-pandemic and is poised for further growth, according to RHB Research.
It said China’s reopening could lead to an increase in foreign direct investments (FDIs), particularly for the manufacturing sector.
“This is further facilitated by the fact that Malaysia is one of China’s export partners and due to the country’s strategic location as a gateway to Asean,” it added in a research note today.
RHB Research noted that RM15.3 billion worth of industrial properties – factories, warehouses and manufacturing facilities – were transacted in the country in the first nine months of last year (9M 2022), up 35 per cent compared with RM11.3 billion in the corresponding period of 2021.
“Notably, the value transacted in 9M 2022 for industrial properties of RM15.3 billion makes up 90 per cent of 2021’s full-year transacted value of RM17 billion, and likewise, the number of transactions for industrial properties domestically grew by 57 per cent year-on-year (y-o-y) to reach 6,043 transactions in 9M 2022 (9M 2021: 3,837 transactions),” it said.
RHB Research pointed out that the number of industrial properties transacted in 9M 2022 alone already exceeded 2021’s full-year number of 5,595 transactions.
Such trends indicate that Malaysia’s industrial property sector has grown over the years, it said.
According to the research house, industrial property transactions in states such as Johor also recorded a commendable 72 per cent y-o-y in terms of transaction value in 9M 2022, reaching RM2.7 billion versus RM1.6 billion in the same period of 2021.
“Even if there were no industrial property transactions recorded in the fourth quarter of 2022, the RM2.7 billion transacted during 9M 2022 in Johor was already higher than the full-year transacted values between 2017 and 2021.
“This is not much of a surprise, given Johor’s proximity to Singapore, which houses a lot of multinational corporations,” it said.
RHB Research retained its “neutral” stance on the overall construction sector considering the risks surrounding public infrastructure projects, but advocated that investors focus on contractors that have ventured into new types of jobs such as data centres and industrials.
Its top picks, which fit the criteria of that strategy, are Kerjaya Prospek Group Bhd and Sunway Construction Group Bhd.
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