Malaysia Emerges as Strategic Hub for Resilient Workspaces in Southeast Asia

Malaysia Emerges as Strategic Hub for Resilient Workspaces in Southeast Asia

Knight Frank: Global corporates targeting over 100 million sq ft of new workspace – Malaysia primed to benefit amid rising demand for purpose-led real estate

 50% of global occupiers plan to expand their real estate footprint within the next 3–5 years, representing
demand for over 104 million sq ft of new workspace globally.

 Top priority for corporate real estate (CRE) leaders is enhancing operational efficiency and resilience,
surpassing ESG compliance and even innovation.

 Demand is shifting to quality and flexibility — shorter leases, hybrid work-enabled layouts, and regional
hub strategies are taking precedence over large, monolithic HQs.

 Malaysia’s growing role in the region is driven by increased interest in KL, Johor, and Penang, especially
for advanced manufacturing, logistics, and regional HQ setups.

KUALA LUMPUR, 5 June 2025 – Malaysia is increasingly recognised as a key beneficiary of the global real estate transformation, as multinational corporations seek to align their real estate portfolios with operational resilience, sustainability, and future-ready workspaces. This global trend is spotlighted in Knight Frank’s newly released (Y)OUR SPACE 2025 global report, which captures responses from nearly 300 corporate real estate (CRE) leaders managing over 650 million sq. ft. of space worldwide.

As corporates globally confront economic volatility, geopolitical risk, and the need to rapidly adapt to digital transformation, 50% of global occupiers expect their footprint to grow in the next 3–5 years, representing over 104 million sq ft of new space. Malaysia, with its maturing infrastructure, trilingual talent pool, and expanding industrial corridors, is firmly on the radar.

“Occupiers are cutting loose from legacy portfolios, but they’re not abandoning space,” said Dr. Lee Elliott, Partner and Head of Global Occupier Research at Knight Frank.

“They’re moving to better space and into more locations as they regionalise their portfolios.”

Locally, Knight Frank Malaysia has seen increasing interest from multinationals looking to establish regional HQs, high-spec industrial hubs, and sustainable logistics solutions in Greater Kuala Lumpur, Johor, and Penang.

The demand is particularly strong among firms focused on advanced manufacturing, technology, and regional distribution.

Keith Ooi, Group Managing Director of Knight Frank Malaysia, remarked “Malaysia offers the right mix of cost efficiency, political stability, and market access that global occupiers are looking for today. But what truly sets us apart now is the growing quality of our industrial and office spaces — they’re being designed with resilience, ESG-readiness, and long-term adaptability in mind.”

Knight Frank’s research shows that the top priority for CRE leaders today is enhancing operational efficiency and resilience – cited by 38% of respondents – ranking above ESG compliance or innovation. This reflects a flight to functionality, where occupiers prefer shorter lease terms, hybrid-ready layouts, and location strategies built around risk diversification and talent access.

Teh Young Khean, Senior Executive Director of Office Strategy & Solutions at Knight Frank Malaysia, said “Malaysia’s value proposition goes beyond location and affordability. Our strong multilingual workforce, growing tech talent base, and increasing ESG focus make us one of the most versatile markets for regional operations. The flight to quality is real — and Malaysia is ready.”

Naythan Chong, Director of Office Strategy & Solutions at Knight Frank Malaysia, added “The way organisations view the office is evolving — it’s no longer just about occupancy, but outcomes. In Malaysia, we’re seeing increasing demand for spaces that are not only efficient but enable collaboration, culture-building, and tech integration. Occupiers are asking us for spaces that empower teams, not just house them.

Meanwhile, 63% of global respondents now prioritise purposeful, adaptable amenities over prestige-focused features — underscoring a shift toward practical design and measurable performance. This aligns well with Malaysia’s newer inventory of commercial developments, which are increasingly built to green and wellness-certified standards.

Tim Armstrong, Partner and Global Head of Occupier Strategy and Solutions at Knight Frank, added “Corporates are committing to new space, but they’re building in optionality. They’re looking at flexible lease terms and regionalising their footprints to remain nimble and reduce exposure to geopolitical risk. This is driving long-term leasing momentum and accelerated planning cycles.”

With rising expectations placed on CRE teams to enable transformation while navigating constrained conditions, the opportunity for Malaysia lies in delivering experience-led, cost-efficient, and strategically located workspaces that meet both global and local performance benchmarks.

As the (Y)OUR SPACE campaign continues over the next 24 months, Knight Frank Malaysia remains committed to guiding corporate occupiers and investors in shaping portfolios that go beyond real estate and drive business success.

— end of press release —

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