The year 2025 for the Malaysian property progress of new mega infrastructure projects and the transition to new technologies. These will serve as the main drivers for the market, said CBRE | WTW group managing director Tan Ka Leong.
“As we look to 2025, it is clear that the Malaysian property market is entering a transformative phase. From infrastructure projects such as the East Coast Rail Link (ECRL), the Johor-Singapore Rapid Transit System Link (RTS Link) and the Pan Borneo Highway to the adoption of advanced technologies and sustainable urban redevelopment, the nation is poised to deliver promising opportunities for investors and stakeholders,” said Ka Leong at the launch of CBRE | WTW’s 2025 Malaysia Real Estate Market Outlook report titled Sustaining Game Changers on Jan 9.
“To maximise and sustain the benefits from these game changers, development planning and building regulations should be reviewed and updated to fully leverage the potential of the property market,” he added.
The report focused on five areas in Malaysia — the Klang Valley, Penang, Iskandar Malaysia (Johor), Sabah and Sarawak. It discussed the key trends and opportunities shaping the property market in 2025. CBRE | WTW’s representatives of the areas highlighted that the property market will continue to record a sustained growth momentum post-Covid.
The Klang Valley: Poised for greater growth
“The Klang Valley real estate market is set for growth, propelled by advancements in the industrial, retail and hospitality segments,” said CBRE | WTW associate director of research and consultancy Mary Kurien.
For instance, she highlighted that industrial parks are evolving towards high-tech industries, integrating artificial intelligence (AI) and green certifications, which align with the New Industrial Master Plan (NIMP) 2030.
“Demand for AI-driven solutions, cloud services and data centre developments continues to fuel this momentum. Similarly, the retail and hotel sectors stand to benefit from a vibrant tourism industry, further fortifying the Klang Valley’s market resilience.”
She added that retailers are showing renewed optimism amid activities in retail mall acquisitions and the entry of new brands. “However, older malls, which have been registering a decline in occupancy in the past few years, continue to struggle and search for a niche in the changing retail landscape.”
In this context, Kurien noted that key players have experimented with various strategies to make malls more attractive, including offering more diverse dining options, art and culture platforms, entertainment and sports facilities and open-concept zones.
For the hotel sector, Malaysia is slated to attract more than 31 million international tourists in 2025, ahead of “Visit Malaysia Year 2026”.
“This anticipated influx presents an opportunity for increased demand across all hospitality market segments.”
Kurien noted that by the end of 2025, over 2,000 new 5-star hotel rooms are expected to enter the market, representing 61% of the new hotel rooms in the Klang Valley.
Meanwhile, for residential, she anticipated a trend towards the incorporation of a workspace area such as co-working lounges. “We are anticipating a trend towards balancing urban living and work styles. Additionally, there will also be a focus on green building features such as sustainable building materials, solar panels and electric vehicle (EV) charging infrastructure.”
Iskandar Malaysia: Game-changing developments
The establishment of the Johor-Singapore Special Economic Zone (JS-SEZ) and the Forest City Special Financial Zone will significantly benefit the Johor region.
“Furthermore, the upcoming completion of the RTS Link between Johor and Singapore is expected to enhance cross-border connectivity, spur economic activity and attract high-value investments,” said CBRE | WTW director Paul Brendan Chan.
He added that these infrastructure projects are boosting the appeal of the residential market in Iskandar Malaysia. “There is a mushrooming of high-rise residential developments, mainly focused in the Johor Bahru city centre and the fringes, which are aiming to capitalise on the advanced progress of the RTS.”
According to him, residential property transactions were highly active for the first nine months of 2024 (9M2024). Landed residential property transaction volume and value increased 15.2% and 34.6%, respectively, in 9M2024 compared with the same period in 2023. High-rise properties, on the other hand, increased 46% (volume) and 57% (value) during the period.
“Meanwhile, rising demand for Grade-A warehouses and active data centre developments are driving the growth of Iskandar Malaysia’s industrial sector,” said Chan, adding that there is strong investment growth as well as demand from the e-commerce, retail and third-party logistics sectors.
“These factors are expected to drive robust economic and real estate growth, solidifying Johor’s prominence in Malaysia’s property landscape.”
Penang: Investments abound
Penang’s industrial sector has witnessed strong growth, with total approved manufacturing investments of RM5 billion in the first half of 2024 (1H2024), up from RM4.3 billion recorded in 1H2023.
“A new industrial park is set to be launched in Seberang Prai Tengah by AME Elite Consortium Bhd (KL:AME) at Northern TechValley @ BKE with a gross development value of RM1 billion. There are also small-scale, ready-built small and medium industry factories launched in Bukit Mertajam,” said CBRE | WTW (Penang) director Tan Chean Hwa.
He added that there is a strong demand for office spaces from multinational corporations and global business services.
Projects such as the Penang Silicon Island and the upcoming Penang LRT Mutiara Line project are expected to sustain the growth momentum of the Penang property sector.
“The reclamation of Silicon Island is ongoing, with construction set to begin in 2026. The island will also host the LRT depot. Hence, Penang is poised to maintain its status as a top investment destination, thanks to its robust manufacturing ecosystem, business-friendly environment and skilled talent pool,” said Chean Hwa.
Sabah: Steady growth
For the Sabah property market, C H Williams Talhar & Wong (Sabah) director Cornelius Koh said the market has been in recalibration mode since the Covid-19 pandemic.
“Sabah’s real estate market remains steady, with residential properties continuing their upward trajectory in 2025. The hotel sector shines as a standout performer, driven by the state’s thriving tourism industry. These trends underscore Sabah’s ability to maintain consistent growth and resilience across its property landscape,” said Koh.
“About 3.7 million visitors to Sabah are [expected] for ‘Visit Malaysia Year 2026’, with a projected RM9.1 billion in tourism receipts.”
Additionally, Koh noted that the Kota Kinabalu International Airport and the Tawau Airport are slated to undergo their respective expansions, which will allow them to accommodate more passengers when completed.
Sarawak: Tourism boost
Similarly, in Sarawak, the hotel sector stood out as the key performer. As at November 2024, the state recorded a record-breaking number of visitors, surpassing pre-pandemic levels.
“As at November 2024, Sarawak recorded a total of 4.35 million visitor arrivals. For 2025, this is expected to hit five million visitors, with an estimated tourism receipt of RM13 billion,” said C H Williams, Talhar, Wong & Yeo Sarawak director Yip Phooi Leng.
The boost in arrivals in 2024 can also be attributed to the many significant events held, including the Rainforest World Music Festival, the 2024 Sukma Games and the “friendship city” collaboration with China.
“Sarawak’s emergence as a rising economic force highlights its journey towards full recovery. Supported by socioeconomic and political stability, the state is drawing attention with projects like the Autonomous Rapid Transit (ART), currently under construction. The residential market is anticipated to thrive, with growth in transaction volumes, prices and rentals. The commercial sector continues its recovery while the hotel industry gains momentum with higher occupancy rates and room prices, signalling a promising year ahead for Sarawak’s property market,” said Yip.
Chin Wai Lun is a writer with City & Country, The Edge Malaysia
| Table of Contents
Top Ideas
This infographic shows the current developments in Malaysia’s property sector based on refasion data Scherngard Center for International R&D & R&D Research with CBRE has provided.
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