Kuala Lumpur – According to The Wealth Report, Knight Frank’s flagship publication, global commercial real estate (CRE) investment rebounded strongly in 2024, rising to US$806 billion, marking an 8% year-on-year increase. This follows the sharp 43% contraction recorded in 2023, signaling renewed investor confidence. Cross-border capital flows also gained momentum, increasing by 12% to US$171 billion, underscoring a global appetite for real estate investments.
Malaysia mirrored this global trend, experiencing an uptick in commercial real estate transactions, driven by high-net-worth individuals (HNWIs) and institutional investors seeking long-term value. This recovery aligns with the rise in Malaysia’s HNWI population, reflecting growing wealth accumulation and investment interest.
Will Matthews, Head of UK Commercial Research at Knight Frank, commented: “Total global commercial real estate investment rose to US$806 billion in 2024, marking a significant rebound from the previous year’s downturn. Despite global economic uncertainties, we are witnessing a resurgence in investor confidence, with private capital leading the charge. The continued decline in swap rates and anticipated interest rate cuts are expected to create a more favorable investment climate, unlocking greater transaction volumes in 2025.”
Private Capital and Institutional Buyers Drive Growth
Private capital remained the dominant force in the CRE market in 2024, with institutional investors deploying US$268 billion—accounting for 33% of total investments. Public market investors also saw the highest year-on-year increase, posting a 22% rise in investment volumes.
In Malaysia, private investors have been particularly active in the office and industrial sectors, capitalizing on strong demand for high-quality assets. The industrial sector led global investment, securing US$216 billion, while the living sector followed closely at US$205 billion. Office investment reached US$173 billion, signaling a recovery in confidence in workplace assets.
Keith Ooi, Group Managing Director of Knight Frank Malaysia, remarked: “Malaysia’s commercial real estate market continues to evolve, with investors showing strong interest in prime office and logistics assets. As economic conditions stabilize and financing costs ease, we expect a wave of strategic acquisitions, particularly in key urban centers such as Kuala Lumpur, Penang, and Johor Bahru. Investors are increasingly seeking long-term value, and the resurgence of private capital plays a crucial role in this recovery.”
Allan Sim, Senior Executive Director representing Land & Industrial Solutions, said: “The rebound in global commercial real estate investment has had a direct impact on Malaysia, where we are seeing increased activity from HNWIs and institutional players. With interest rates expected to ease, we anticipate stronger demand for prime assets, particularly in Kuala Lumpur’s office and logistics sectors.”
High-Net-Worth Individuals (HNWIs) on the Rise
The number of HNWIs worldwide grew by 4.4% in 2024, reaching 2,341,378 individuals. North America led this expansion with a 5.2% increase, followed by Asia at 5%, Africa at 4.7%, and Australasia at 3.9%. The Middle East (2.7%), Latin America (1.5%), and Europe (1.4%) also saw gains.
Malaysia has been a key beneficiary of this wealth growth, with an increasing number of ultra-wealthy individuals diversifying their portfolios into real estate. The country remains an attractive destination for high-value property investments, particularly in the luxury residential and prime commercial segments.
James Buckley, Executive Director from Capital Markets – Investments, commented: “The growing population of high-net-worth individuals in Malaysia is reshaping the local real estate market. We are witnessing strong demand for luxury residences, particularly in Kuala Lumpur, as well as a heightened interest in commercial properties that offer stable yields. With global investors also returning to real estate, Malaysia stands to benefit from increased capital inflows in the coming years.”
Malaysia’s Position in the Global Investment Landscape
The US remained the world’s largest hub for ultra-wealthy individuals in 2024, home to nearly 39% of those with assets exceeding US$10 million. Asia is projected to outpace North America in wealth creation over the next four years, but the US remains dominant.
Meanwhile, cross-border investment activity has strengthened, with the UK, US, and Canada ranking as the top sources of global capital. London retained its position as the leading destination for cross-border real estate investment, attracting US$9.6 billion, followed by Sydney (US$8.6 billion) and Tokyo (US$5.6 billion).
In Malaysia, international investor interest remains strong, particularly in Kuala Lumpur’s prime office and hospitality sectors. With a significant pool of capital ready for deployment, 2025 is poised to be a turning point for the country’s real estate market.
Outlook for 2025: Renewed Momentum in Real Estate Investment
Will Matthews added: “Despite the challenges posed by geopolitical uncertainties and uneven regional recoveries, the global CRE market is in recovery mode. 2025 is expected to be a pivotal year, as anticipated interest rate cuts and stabilizing property prices create a more favorable investment climate. Private capital will play a critical role in this resurgence, driving renewed momentum across the sector.”
With Malaysia positioned as a key player in Southeast Asia’s investment landscape, both domestic and international investors are expected to leverage emerging opportunities, further solidifying the country’s real estate market as a destination of choice.
Data Source: Knight Frank’s analysis of RCA data and The Wealth Report 2024
Private: Investment vehicles controlled by private individuals or entities, primarily engaged in operating, developing, or investing in commercial real estate. Download the report here: The Wealth Report 2025
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