KUALA LUMPUR: Malaysia emerges as a key player in the offshoring market, capturing over eight per cent share in the Asia-Pacific, said global property consultancy firm Knight Frank.
In a statement today, Knight Frank said that Malaysia ranked as the third-best global outsourcing location consecutively since 2004.
“Malaysia offers an estimate of more than eight per cent share of the Asia-Pacific offshoring market, with strong government support to develop digital skills,” it said.
It said that global companies increasingly sought cost-effective solutions to minimise expenses, and a growing number were looking towards offshoring functions as a strategic avenue.
“Amid a challenging business environment which sees a reduction in sentiment among corporate real estate leaders, the Asia-Pacific offshoring market is forecast to more than double to US$185.1 billion by 2032 (US$1=RM4.72).
“This growth is expected to drive an additional office demand of between 4.7 and 5 million square metres per year for the next three years,” it said.
Knight Frank Malaysia executive director of office strategy and solutions Teh Young Khean said that with the new Malaysia Digital status announced by the government, global business services (GBS) players would have a wider option of buildings to choose from.
“Malaysia has observed many GBS companies setting up across various sectors.
“The expansion reflects Malaysia’s dynamic approach to fostering a conducive environment for business growth and innovation,” he said.
Meanwhile, according to the Knight Frank Asia-Pacific Quarter Four 2023 Office Highlights report, overall rents for the region declined 2.4 per cent, with the average vacancy rate increasing by 1.24 per cent for 2023.
“Although there has been a gradual improvement in market sentiment, it remains susceptible to changes in the economic landscape,” it said.
As a note, offshoring is a business practice in which a company moves different operational and service-related functions to other countries to increase efficiency, maximise production capabilities or reduce costs. – BERNAMA
