E-commerce growth will drive smart warehouse demand in 2025.
The domestic logistics sector in Kuala Lumpur is expected to maintain stability throughout 2025 according to a JLL report, benefiting from e-commerce expansion and support from the global technology upcycle driven by surging artificial intelligence (AI) software and hardware that increases modern space demand.
“Effective July 2025, Malaysia expanded the scope of its Sales and Service Tax. The revised SST now includes real estate leasing transactions. We anticipate landlords and tenants will adapt to the 8% taxation rate changes through negotiations to address tax measures,” the report said.
Here’s more from JLL:
The logistics property market showed exceptional strength this quarter, with net absorption fueled by new developments. Quality facilities are experiencing rapid take-up rates, attracting strategic tenancies from sport brands and consumer product companies.
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Market growth continues to be driven primarily by the Automotive sector, E&E industries, and 3PL providers alongside manufacturers. Current new development projects have high occupancy and pre-commitment rates.
2 million square feet added as specialized demand from Automotive, E&E industries, and 3PL providers drives market growth
In Q2 2025, two notable projects in Shah Alam and Pulau Indah collectively injected approximately 2 million square feet of Grade A warehouse space into the market.
We observe that the vacancy rate continues to tighten and remain low, currently standing at just 2%. This low vacancy persists despite recent deliveries, as robust net absorption continues with companies strategically migrating toward premium quality spaces.
Logistics sector demonstrates resilience through stable rents and strengthening investor appeal
Rental rates remained stable with Pulau Indah showing higher growth as new prime facilities narrow the gap with established submarkets, though upcoming SST increases and electricity adjustments in July will likely drive modest cost increases.
REITs continue expanding portfolios through strategic acquisitions, demonstrated by AmanahRaya REIT’s Kuala Langat warehouse purchase via sale-and-leaseback that provides stable income while offering operational continuity to the tenant.
Reference : Why Kuala Lumpur’s logistics sector will remain stable throughout the year | Real Estate Asia