This article is contributed by Dave Platter, Head of Public Relations at IQI Global
More than 20 major media outlets in Malaysia and China covered insights from IQI Co-Founder and Group CEO Kashif Ansari on Chinese FDI (Foreign Direct Investment) in Malaysia this month.
“Chinese FDI is surging, but also changing in three surprising ways,” Mr. Ansari said. “It is of huge importance because investment in recent years adds up to RM126.4 billion (US$30 billion). That’s the equivalent of 7% of Malaysia’s current annual GDP.”
“But since the pandemic, the investment trends have changed in three surprising ways…”
“First, we’re seeing Chinese capital move away from G7 economies and come back to Asia, especially Southeast Asia. Last year alone, Chinese companies poured over $1 billion each into Malaysia, Vietnam, Indonesia, and Singapore. A significant share of that investment went into real estate.”
“The second surprise is that today’s investments are much more strategic and long-term. In the past, Chinese companies focused on large, one-off acquisitions. But now, the priority has shifted to greenfield investments, where these companies build new capacity for the long term. That means demand for greenfield sites with good access to transport and labor markets is rising.”
“The third surprise is that big Chinese state-owned enterprises are dropping into the background. Today, private companies make up the bulk of Chinese investment in Malaysia. In fact, in 2024, state-owned enterprises only accounted for 10% of Chinese FDI in Malaysia. Private companies — both listed and unlisted — accounted for all the rest.”
The shift towards private company investment means transactions will happen more quickly and could lead to even greater investment in the future. Private companies see Malaysia as a key part of their long-term strategy.
What Chinese FDI Means for Real Estate
“All this investment has both direct and indirect impacts on real estate,” said Mr. Ansari.
“The direct impacts are increasing demand for land and facilities where these businesses can locate. Factories, office space, warehouses, processing plants, chip fabs… all of these activities need space, and often quite a lot of it.”
“When demand climbs for a limited supply of land, prices will rise. In Penang, this maxim is even more relevant because the state government believes all developable land will be gone by 2030. That’s why Penang is using reclamation to increase its reserve of land.”
“With commercial real estate, we also expect some upward pressure on prices. Demand for office spaces, especially in Kuala Lumpur, Cyberjaya, Johor, and Penang, will increase.”
“This is an exciting time for Malaysia, and the opportunities are just beginning”
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