Malaysia’s Industrial Sector Outlook Remains Stable Amid Global Shifts, Says Rehda Past President

PETALING JAYA (Nov 27) – Malaysia’s industrial sector is expected to maintain a stable outlook in 2026, underpinned by a steady pipeline of enquiries, though growth momentum may be slower than the past two years, according to industry veteran Datuk Seri Michael KC Yam.

Yam, trustee and past president of the Real Estate and Housing Developers’ Association (Rehda) as well as a patron national council member, shared his insights during the “Industrial Real Estate: Closed-door Strategic Dialogue & Masterclass” organised by the Rehda Institute at Wisma Rehda.

“Based on the current pipeline and enquiries, there will still be a steady flow,” he told EdgeProp, “though I can’t say whether it will accelerate at the rate we saw in the past two years.”

Data Centres Driving Demand
The industrial demand has been significantly supported by data centres, which require large land parcels for redundancy purposes. Yam described these facilities as “gobblers of huge land,” contributing to elevated market activity in recent years.

The surge in demand was influenced by geopolitical uncertainties, including sudden tariff policies imposed by the US under the Trump administration. These disruptions affected manufacturers dependent on international markets, prompting them to reassess risk exposure. As a result, Malaysia emerged as an attractive alternative, offering a stable business environment, supportive legal framework, and investment incentives.

Malaysia Remains Attractive for Investors
Even if geopolitical tensions ease and tariffs return to normal, Yam expects consistent interest in Malaysia’s industrial sector. “People now see that Malaysia is an attractive destination,” he said. “Companies that have diversified their risks will continue to value locations offering stability in the event of similar disruptions.”

While the extraordinary spike in demand seen during peak global uncertainty may not repeat, Malaysia’s industrial sector is poised to benefit from the structural shifts already underway, ensuring a sustained and steady pipeline of investment.