Malaysia Warehousing Market Outlook to 2028

Malaysia Warehousing Market Overview:

Malaysia Warehousing Market reached a size of USD 500 million in 2023. This market is driven primarily by the country's strategic location within Southeast Asia, which has made it a crucial logistics hub for the region. The growing demand for e-commerce, coupled with increased international trade, has significantly boosted the need for warehousing facilities.

Key players in the market include Tiong Nam Logistics Holdings Berhad, YCH Group, Kerry Logistics Network Limited, Kuehne + Nagel, and DHL Supply Chain. These companies have established strong footholds due to their extensive networks and high standards of service.

In 2023, Tiong nam completed a new 1.1 million square feet of RM200 million mega-warehouse facility for lease to Mercedes-Benz in Senai, Johor. This will enhance logistics efficiency for Mercedes-Benz, catering to the growing demand in the automotive sector and is expected to play a crucial role in supporting Mercedes-Benz's supply chain operations across Southeast Asia.

Selangor is a pivotal hub in Malaysia's warehousing market, primarily due to its strategic location, advanced infrastructure, and proximity to key transportation nodes. As the most developed and populous state in Malaysia, Selangor plays a crucial role in the country's logistics and supply chain sectors.

Malaysia Warehousing Market Segmentation:

By Business Model: Malaysia warehousing market is segmented into industrial freight/retail, cold storage, custom warehouses, container freight & others. In 2023, Industrial Freight/Retail dominated this segment, driven by the country's robust manufacturing sector and growing e-commerce activities. This segment benefited from increased demand for storage and distribution solutions to support the efficient movement of goods across domestic and international markets.

By End-User: Malaysia warehousing market is segmented into food & beverage, retail, industrial & construction, automotive & engineering, pharmaceuticals & others. In 2023, Food & Beverage dominated this segment driven by the growing demand for cold storage and distribution facilities. This dominance was further supported by increased consumer spending and the expansion of the food delivery and retail sectors across the country.

By Region: Malaysia warehousing market is segmented into Selangor, Johor, Penang, Sarawak, Sabah & others. In 2023, Selangor was the dominant region due to its strategic location and well-developed infrastructure. The region's proximity to major ports and urban centers also made it a preferred choice for logistics and distribution activities.

Malaysia Warehousing Industry Analysis:

Malaysia Warehousing Market Growth Drivers:

Expansion of E-Commerce Sector: This growth has resulted in a surge in demand for warehousing facilities, particularly in urban centers like Kuala Lumpur and Johor Bahru. In 2022, 29.5 million people were active internet users in Malaysia, facilitating access to ecommerce. The demand for last-mile delivery services and the need for efficient storage solutions have led to the expansion of warehousing infrastructure across the country.

Strategic Locations & Trade Agreements: Malaysias strategic location in Southeast Asia, coupled with its participation in multiple free trade agreements (FTAs) like the Regional Comprehensive Economic Partnership (RCEP) signed in 2020, has significantly boosted its warehousing market. The RCEP, which includes major economies such as China and Japan, facilitates smoother trade operations, increasing the need for warehousing facilities to handle the influx of goods.

Government Initiatives and Infrastructure Development: The Malaysian governments ongoing infrastructure projects, such as the East Coast Rail Link (ECRL) has created new opportunities for the warehousing market. It is a major railway project in Malaysia, spanning 665 kilometers and designed to enhance connectivity between the east and west coasts of Peninsular Malaysia.

Malaysia Warehousing Market Challenges

High Land and Construction Costs: In 2024, the average price of industrial land in key areas like Kuala Lumpur and Selangor is between MYR 60 to MYR 200 per square foot, making it increasingly difficult for companies to expand their warehousing capacities. Additionally, construction costs have risen due to inflationary pressures and supply chain disruptions.

Regulatory and Compliance Issues: The Malaysian Investment Development Authority (MIDA) introduced stricter guidelines for the construction and operation of warehousing facilities, particularly those handling hazardous materials. These regulations require extensive documentation, safety measures, and compliance with environmental standards, leading to higher operational costs and delays in project approvals.

Malaysia Warehousing Market Government Initiatives:

National Logistics and Trade Facilitation Masterplan (NLTFM): The National Logistics and Trade Facilitation Masterplan (NLTFM) is a strategic initiative launched by the Malaysian government in March 2015 to enhance the productivity and competitiveness of the country's logistics industry. The plan also includes initiatives to streamline customs procedures and reduce logistics costs, which are expected to benefit the warehousing market by increasing efficiency and attracting foreign investment.

East Coast Rail Link (ECRL) Project: Construction began in August 2017 after the Malaysian government signed an agreement with the China Communications Construction Company (CCCC) for a project valued at USD 13.1 billion. The project has already attracted investment from logistics companies looking to capitalize on the improved connectivity and the strategic location of warehousing hubs near the ECRL stations.

Malaysia Warehousing Market Competitive Landscape:

Player
Headquarter
Establishment Year
Tiong Nam
Johor Bahru
1975
Maple Tree
Singapore; office in Kuala Lumpur
2000
TASCO Bhd
Shah Alam
1974
PKT Group
Shah Alam
1974
LYL Group
Petaling Jaya
1990

RS Group: In 2023, RS Group has opened a new 50,000 sq. ft warehouse in Shah Alam, Malaysia, to support growth and expand services. Located 25 minutes from Klang Sea Port and 50 minutes from KLIA, it ensures order fulfilment within 1-2 days for local businesses. In collaboration with Geodis MY, the Industry 4.0-ready facility features wireless coverage, SAP, and vendor-managed inventory systems for efficient operations

Maple Tree Logistics: In 2022, Mapletree Logistics Trust (MLT) completed the acquisition of two prime land parcels in Subang Jaya, Selangor, Malaysia, for a total price of S$21 million. This acquisition is part of MLT's strategic plan to develop the first mega modern logistics warehouse in Subang Jaya, which is recognized as a significant logistics hub due to its excellent connectivity to Kuala Lumpur city center and Port Klang.

Malaysia Warehousing Future Market Outlook:

Malaysia Warehousing Market is expected to reach USD 700 Mn by 2028. The ongoing expansion of the e-commerce sector is expected to continue fueling demand for warehousing facilities, particularly in urban areas where the need for quick delivery services is highest.

Future Market Trends:

Adoption of Automation and AI: Over the next five years, the adoption of automation and artificial intelligence (AI) in warehousing operations will become increasingly prevalent in Malaysia. Companies will invest in automated storage and retrieval systems (ASRS), robotics, and AI-driven inventory management to improve efficiency and reduce operational costs.

Sustainability and Green Warehousing: The future of the Malaysia warehousing market will be marked by a strong focus on sustainability. Warehousing companies will increasingly adopt green building practices, such as the use of energy-efficient lighting, solar panels, and rainwater harvesting systems. There will also be a growing emphasis on reducing carbon footprints through the use of electric vehicles for transportation within warehouses and eco-friendly packaging materials.

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