Which Sectors Are Driving Factory Demand in Malaysia (2025)?

Malaysia's factory property market is showing strong momentum in 2025, with several industries expanding rapidly and increasing demand for modern, well-located industrial space. Investors and developers alike are taking note as factory space gets snapped up by companies in logistics, tech manufacturing, and sustainable agriculture.

1. 3PL (Third-Party Logistics) Providers

The rise of outsourcing logistics has driven 3PL players to secure more warehouse and factory space. They need large, high-ceiling buildings with ample loading bays and access to major highways. Johor, Klang, and Shah Alam remain hotspots.

• Key Demand: Large footprint, floor loading = 10kN/m²
• Popular Areas: Port Klang, Kapar, Senai, Bayan Lepas

2. E-Commerce Fulfillment & Last-Mile Logistics

With continued growth in online shopping, especially in Tier 2 cities, e-commerce brands and fulfillment centers are driving up demand for light industrial units and urban fringe factories.

• Key Demand: Proximity to population hubs, fast turnaround access
• Popular Areas: Subang, Puchong, Balakong, Johor Bahru

3. EV Manufacturing & Supply Chain

Driven by green mobility policies and regional investment, Malaysia’s EV sector has become a major occupier of industrial land. Battery manufacturers, component suppliers, and EV assemblers are setting up factories in Negeri Sembilan and Kulim Hi-Tech Park.

• Key Demand: High-spec manufacturing space with clean energy readiness
• Popular Areas: Seremban, Kulim, Proton City, Melaka

4. Cold Storage & Temperature-Controlled Logistics

The F&B and pharmaceutical sectors are driving demand for cold storage facilities. Developers with build-to-suit capabilities are capitalizing on this trend, especially near ports and airports.

• Key Demand: Refrigerated warehouse space, dual-temp zones, backup power
• Popular Areas: Shah Alam, Pasir Gudang, Butterworth

5. Agritech & Smart Farming

Modern agriculture companies are setting up R&D farms, vertical farming hubs, and smart greenhouses, particularly on converted agricultural land. These hybrid facilities blur the line between factory and farm.

• Key Demand: Custom facilities with irrigation systems, automation, and partial open-air setups
• Popular Areas: Sepang, Dengkil, Sedenak, Kluang

What This Means for Industrial Investors

As more industries adopt automation, e-commerce, and sustainability practices, demand will continue to shift toward higher-spec factories with flexibility for tech, logistics, and energy efficiency. Factory buyers should look for:

• Ceiling height = 30ft
• Solar panel compatibility
• High power supply (= 400A)
• Accessibility to ports, highways, and airports

Start Your Search for Strategic Factory Investments

• Browse Industrial Properties Ideal for Logistics and E-Commerce
• Find Land Suitable for Cold Chain or EV Manufacturing
• See Commercial Assets with Industrial Potential

Terra Group specializes in matching investors with future-ready factory properties across Malaysia. Reach out for site visits or investment consultancy.