Industry Leaders Urge Faster Approvals and Clearer Processes to Strengthen Malaysia’s Industrial Sector

Industrial stakeholders and property developers are calling for stronger coordination between government agencies, local councils, utility providers and the private sector to accelerate Malaysia’s industrial growth. The discussion took place during the launch of EdgeProp’s Industrial Special Report at the Industrial Real Estate: Closed-door Strategic Dialogue & Masterclass, organised by the Rehda Institute at Wisma Rehda.

The report was previously soft-launched during Rehda Institute’s Taiwan Study Trip 2025 — Industrial & Sustainability Study Tour held in Taipei from Nov 18–21.

Rising Costs and Structural Hurdles Top Industry Concerns

Participants highlighted that escalating project costs remain a pressing challenge. Higher electricity tariffs, rising operating expenses, labour shortages and increasing utility fees risk undermining Malaysia’s competitiveness compared to regional investment hotspots such as Vietnam and Indonesia.

Developers also pointed to persistent concerns regarding tax frameworks and infrastructure readiness—particularly the availability and stability of electricity supply. These challenges can influence investor sentiment, especially in regions experiencing high demand for industrial land in Selangor and mature industrial zones such as the Subang area.

Approval delays were a central point of discussion, with multiple developers sharing experiences of bottlenecks involving local authorities and utility agencies. While some councils have shifted to clearer online submission systems with defined processing timelines, many others still depend on manual processes that slow down project execution. In certain cases, developers faced project halts or even financial penalties due to delays caused by external parties.

Long conversion periods for industrial land, zoning inconsistencies, and the lack of a clearly designated decision-making authority when delays occur were also highlighted. Concerns surrounding new policies — including possible upcoming amendments to the Real Property Development Act — have added further uncertainty to the industrial development landscape.

ESG and Infrastructure Readiness

Although ESG compliance is increasingly necessary, industry representatives noted that the initial cost of meeting sustainability standards is substantial. Many developers currently adopt entry-level green features, while exploring practical technologies such as waste-management tracking systems and solar solutions. Full-scale smart industrial park operations, however, remain challenging due to cost sensitivity among tenants, including occupiers seeking factory spaces in Puchong or more advanced industrial parks across Greater KL.

Infrastructure remains a nationwide issue, particularly in terms of power capacity, water availability and waste-management systems. Participants stressed the need for clearer visibility on grid capacity to support planning for future industrial developments. More transparent processes, faster approvals and standardised requirements across authorities were identified as key steps to enhance Malaysia’s competitiveness in attracting high-value industries.

Legal Compliance Critical to Avoid Costly Setbacks

Noelle Low Pui Voon, partner at Halim Hong & Quek (HHQ), stressed the importance of thorough legal due diligence when dealing with industrial land development. She elaborated on regulatory requirements under the Industrial Coordination Act, land classifications, zoning rules and express conditions — all crucial aspects when foreign investors are involved.

Low warned that failure to obtain necessary state approvals or complete land conversions could result in void transactions, forfeited agreements and financial losses. She recommended early engagement with authorities, landowners and professional advisors to ensure regulatory compliance and risk mitigation.

Integrating Agriculture, Logistics and Manufacturing

AJC Planning Consultants principal Julie Chok emphasised the synergy between agriculture, logistics and manufacturing sectors. She noted that integrated practices — including contract farming, on-site processing and supply-chain clustering — can improve productivity and uplift local economies.

Chok highlighted the need for sustainable and smart infrastructure, such as phased road networks, water-recovery systems, utility access, carbon-sequestration initiatives and smart farming technologies. Such elements not only enhance the efficiency of industrial land use but also support the development of resilient industrial-agro ecosystems that benefit surrounding communities.

Asia Maintains Strong Momentum in Electronics Exports

According to Knight Frank Malaysia executive director Allan Sim, global trading trends in 2024 continue to underscore Asia’s rising dominance in manufacturing and exports. The US remains the world’s largest importer, while China retains its lead in global exports — driven by strong performance in electronics, machinery, computers and vehicles.

Sim noted that Asia’s export structures have increasingly aligned, showcasing the region’s strength in electronics and engineering-related components. However, geopolitical tensions, tariff uncertainties and reshoring efforts by major economies are pushing manufacturers to reassess their global footprint.

Sectors such as pharmaceuticals, automotive, aerospace and electronics are experiencing heightened disruption, prompting companies to diversify production and reduce dependency on traditional manufacturing hubs. Despite these challenges, Southeast Asia remains one of the most attractive destinations for future investment due to its stable fundamentals, strategic location and expanding consumer base — factors that continue to fuel interest in commercial property in KL, office space in Bukit Jalil and other emerging industrial corridors across Malaysia.