KUALA LUMPUR, Sept 24 — The various incentives unveiled under the RM35 billion short-term Economic Recovery Plan (Penjana) will help to encourage more foreign direct investments (FDIs), says Knight Frank Malaysia.

Its capital markets executive director Allan Sim said there is a generous tax holiday period of up to 15 years for foreign companies making new investments in the manufacturing sector with capital investments of RM500 million and above.

"This, coupled with the fast-track approval mechanism for manufacturing licences and tax incentives with the establishment of the Project Acceleration and Coordination Unit (PACU) at the Malaysian Investment Development Authority (Mida), will help to raise the country’s attractiveness in the eyes of foreign investors,” he said in a statement today in conjunction with the release of its Asia-Pacific Warehouse Review.

He said with these timely incentives, combined with competitive real estate and labour costs, Malaysia would be positioned as one of the main beneficiaries among its Asean counterparts, in capturing the shoring of manufacturing and supply chain operations amid the on-going restructuring of global supply chains.

"We will also likely witness a positive spill-over effect in other segments of the industrial property market predominantly in larger purpose-built factories or large tracts of industrial land with the potential entry or relocation of new global industrial players,” Sim said.

Meanwhile, the review, which tracked prime warehouse rents across 17 key cities, registered an average change of -0.02 per cent in the first half of 2020 as compared with the same period last year despite the Covid-19 pandemic.

The independent global property consultancy said it expects the average rental to grow between three and five per cent by the end of 2020.

The review highlighted, among others, market conditions for 16 of the 17 cities tracked.

Among highlights of the review were expectation of market conditions for 16 of the 17 cities tracked to remain stable or improve over the next 12 months, and the positive outlook for growth in the second half of 2020 due to higher space appetite from e-commerce players and essential commodities. — Bernama