Logistic property market remains resilient, JLL says
26 Apr 2022
The rapidly growing e-commerce sector will continue to boost market demand for logistic properties in Malaysia and other Asia Pacific countries, according to JLL Property Services (M) Sdn Bhd.
At JLL’s 1Q2022 Real Estate Market Perspective webinar on Tuesday (April 26), on the topic of “What’s next in APAC and Malaysia Logistic Sector?”, JLL researcher and consultant Eva Soo shared that despite more supply of industrial properties and warehouses that are expected to enter the market from 2023 onwards, the overall property occupancy rate and rental outlook remains bright.
“There are more planned supplies coming on stream in the short future, which include some speculative kind of product… Looking at the current situation, 49% of the total occupiers of prime logistic warehouses are third party logistic players, followed by manufacturing and FMCG (fast moving consumer goods). Currently, the share for e-commerce is only at 6%. However, we foresee the share will be increasing significantly very soon. The sector will help to absorb the upcoming supply.
“In terms of rent, it has been increasing steadily in the past two years. Moving forward, with the aggressive expansion of 3PL (third party logistic player) and e-commerce sector, very likely the rent will continue to go up,” Soo shared during her presentation.
JLL Asia Pacific head of logistic and industrial Tom Woolhouse concurred with Soo on the positive outlook of the e-commerce logistic market in Malaysia as well as other APAC countries, adding that the contribution of APAC e-commerce sales currently account for 65% of the total global e-commerce sales.
“The contribution [of APAC e-commerce sales] now is more than half in the total global sales. We feel that the market size of e-commerce could be doubled within the next five years. With that, it is very important to have more quality logistic spaces in the region to support the market growth,” Woolhouse said.
He also highlighted six key elements of building a future-proof smart warehouse, namely automation and robotics, advanced surveillance systems, warehouse management systems, vision technologies, full network connectivity, and sustainability.
Representing the government, Malaysia Investment Development Authority (MIDA) senior deputy director Masri Idris shared that Malaysia is well prepared for the rapid growing logistic and e-commerce sector.
Under the 12th Malaysia Plan (2021-2025), Malaysia is targeting to increase 10% cargo volume and aims to be one of the top 10 countries of the World Container Port ranking. The government is also eyeing to be one of the top 30 countries in the World Bank Logistics Performance list.
“To do that, we are addressing challenges in policy planning, coordination and implementation so that the role of various authorities can be clearly defined while enforcement is enhanced. At the same time, a centralised database for the transport and logistics sector will be established. It will comprise a comprehensive layered map and statistics related to roads, rail, aviation and maritime services,” Masri noted.
Meanwhile, in the panel discussion session, which was moderated by JLL chief growth officer Christophe Vicic, JLL country head YY Lau raised her concerns about the Kuala Lumpur office market, especially the existing old office buildings.
“While there is new supply [of office] coming in the next few years and the current occupancy rate is not going back to the pre-pandemic level yet, the old buildings’ landlords need to reposition or repurpose your building to be competitive enough in the tough market. The future trend of offices is no longer designed just for work, but a place for discussion and active collaboration.
“While location is still very important, we found out that employers are now looking for more when in search of an office. They want a place that is able to attract talents, which could provide a good working experience and fun environment, for them to stay on,” Lau said.
Source: The Edge Markets