Malaysia’s real estate sector is poised for continued growth as analysts highlight untapped potential in both established players and emerging developers. RHB Investment Bank suggests that while large-cap property stocks remain attractive, smaller firms with innovative business models could offer surprising upside in the coming year. The investment firm maintains an optimistic outlook, citing diversified revenue streams and strategic land holdings as key drivers for future performance.
Industrial projects and data center ventures have become significant growth catalysts, transforming traditional property developers into multifaceted enterprises. Companies like Sunway Bhd and IOI Properties Group have successfully pivoted to these high-demand sectors, generating steady rental income alongside traditional development profits. The Bursa Malaysia Property Index surged 32% last year, reflecting investor confidence in this evolving landscape. However, RHB notes that the sector still trades at a substantial discount to net asset value, suggesting room for further appreciation.
Investors seeking opportunities may find value in mid-sized developers with strong fundamentals, including Sime Darby Property, Mah Sing Group, and Matrix Concepts Holdings. These firms have demonstrated the ability to leverage existing land banks for income-generating projects while maintaining financial stability. RHB emphasizes that consistent sales execution and niche developments could help these companies narrow the valuation gap with larger competitors. The firm maintains an “overweight” rating on the sector, anticipating selective outperformance in 2025.
Despite flat sales growth in early 2024, developers are expected to set more ambitious targets for next year, with projections 5-10% above current levels. RHB suggests that companies with recurring revenue streams and industrial exposure are best positioned to weather market fluctuations. As Malaysia’s property sector continues evolving beyond traditional housing, investors may find compelling opportunities in firms embracing new business models while maintaining disciplined financial management.