By Joseph Wong

Malaysia’s cargo ports have set a new benchmark in 2024, achieving record-breaking levels of activity. This unprecedented performance not only bolsters the economy but also has significant implications for the real estate market, spurring growth in industrial, residential and commercial sectors across the nation.

“In total, we estimate that Malaysian cargo ports will have moved some 778 million metric tonnes of goods by the end of the year and delivered economic benefits worth RM657 billion,” said chartered valuation surveyor and Irhamy Valuers International chief executive officer Irhamy Ahmad. 

The momentum is expected to continue into 2025, with cargo throughput projected to grow by 3% to 5%, potentially reaching 817 million metric tonnes and delivering RM690bil in economic benefits.

Highlighting Malaysia’s competitiveness on the global stage, Ahmad pointed out that Port of Tanjung Pelepas (PTP) ranks fifth on the World Bank’s Container Port Performance Index, surpassing Singapore’s 17th place. “This ranking underscores the remarkable progress and efficiency of Malaysia’s ports,” he noted.

In 2024, PTP became the first Malaysian port to handle over 1 million TEUs (twenty-foot equivalent units) in a single month—a significant milestone. Alongside Port Klang, which achieves similar volumes, both facilities now rank among the top 10 busiest ports worldwide, even outperforming Rotterdam, Europe’s busiest port.

To put this into perspective, Ahmad added, PTP and Port Klang move so many TEUs each year that if you lined up their containers along the equator, they would encircle the Earth—twice.

“It was only about 25 years ago that more than half of Malaysian cargo was

exported to the world through the Port of Singapore instead of ports in Malaysia. That is no longer the case,” he said, pointing out that today, Malaysia’s ports are fully self-reliant and globally competitive.

Driving real estate demand

Ports are integral to Malaysia’s economic success, facilitating the movement of over 90% of its exports. This reliance on maritime trade means that port operations, shipping and marine transport contribute a staggering 40% to the country’s GDP, equivalent to RM657bil in annual economic activity.

Malaysia’s ports also serve as transhipment hubs, handling cargo destined for other countries and generating additional revenue streams. This transhipment role attracts investments in manufacturing, logistics and Free Trade Zones (FTZs), where goods can be processed, assembled, or packaged with minimal regulatory barriers.

Being a logistics hub not only boosts our economy but also provides opportunities for ancillary industries to thrive, Ahmad explained. This economic activity translates directly into real estate demand, particularly for industrial properties. The need for warehousing, distribution centres and cold storage facilities near major ports has surged as trade volumes rise.

Impact on industrial real estate

Industrial real estate near key ports such as PTP and Port Klang is experiencing unprecedented growth. For example, land prices at Johor’s Sedenak Tech Park, located about 50 minutes from PTP, have nearly doubled in two years, climbing from RM40 per sq ft to RM80 per sq ft.

This trend is expected to continue as port activity expands, with developers rushing to meet the demand for industrial spaces. “Industrial parks, logistics hubs and warehousing facilities are the backbone of our trade-dependent economy and their value is intrinsically tied to the performance of our ports,” Ahmad said.

Smaller ports, too, are contributing to localised real estate booms. While they handle less cargo than the larger ports, their expansion creates proportionate opportunities in their regions, driving demand for industrial and commercial properties.

Residential real estate growth

The ports’ influence extends beyond industrial real estate, significantly impacting residential and commercial property markets.

Increased activity around major ports is driving job creation, particularly in logistics, shipping and related industries. This employment growth fuels demand for mid-range housing in port cities, as workers seek accommodations near their workplaces.

Retail spaces are also benefiting, as growing populations in these areas create new opportunities for businesses. Shopping centres, supermarkets and entertainment venues are increasingly in demand to serve the burgeoning communities around ports.

“The spillover effect of port expansion is transforming entire regions,” Ahmad noted. “Selangor, Johor and Penang—home to Malaysia’s largest ports—are poised to see the greatest benefits, but smaller port towns are also experiencing a ripple effect.”

Malaysia’s ports are among the most connected in the world, ranking fifth globally in connectivity, just behind the United States. This connectivity positions Malaysia as a key player in global trade networks.

However, there are challenges. The absence of a cruise terminal capable of accommodating large cruise ships is one limitation. While cargo ports are thriving, this missing infrastructure prevents Malaysia from fully capitalising on the potential of maritime tourism, which could generate additional economic benefits.

Additionally, as trade volumes grow, ports must continuously invest in technology and infrastructure to maintain efficiency and handle increasing demands.

A bright future

The rapid expansion of port-related activities presents opportunities for sustainable development. Developers and policymakers are exploring ways to incorporate green building practices into industrial and residential projects near ports.

This is an opportunity to align growth with sustainability,” Ahmad said. “By adopting energy-efficient designs and environmentally friendly construction methods, we can ensure that the economic benefits of port expansion are long-lasting and responsible.”

Malaysia’s cargo ports have become a cornerstone of the nation’s economy, driving growth across multiple sectors. Their influence on the real estate market is undeniable, with industrial, residential and commercial developments thriving in tandem with port expansions.

These ports are more than logistical hubs. They are economic powerhouses that fuel real estate growth and regional development, Ahmad said.

As the country looks to 2025 and beyond, the synergy between maritime trade and real estate promises to reshape Malaysia’s economic and physical landscapes, cementing its position as a global logistics leader.