Budget 2026: Re-imagining Property And Workspace Infrastructure As Engines Of Growth

Stephanie Ping, CEO and Co-Founder of WORQ

Belanjawan 2026 is set for tabling on Friday, 10 October, and the focus is on reforms in education, housing, and health, all key pillars of social stability. Beyond these social priorities, there is also an opportunity to strengthen Malaysia’s competitiveness by rethinking how the property and real estate sectors can evolve into platforms that foster innovation, collaboration, and investment.

In this context, workspace infrastructure plays an increasingly strategic role. WORQ sees this as part of a broader ecosystem that supports Malaysia’s transition towards a more innovative, high-value, and interconnected economy.

The shift in how people work is also influencing the broader property landscape. In Kuala Lumpur, office vacancy stood at 16.1 per cent in the first quarter of 2025, with Grade A buildings seeing much stronger absorption rates compared with older building stock.

In response to that, there is a growing trend in “flight to quality”, where tenants are leaving traditional spaces for newer, well-designed offices that integrate technology and sustainability features. These well-designed offices are built to serve tenants with components such as layout, natural light, access to public transport, the availability of amenities, and whether the space supports both productivity and wellbeing.

This “flight to quality” trend confirms that competitiveness in the commercial real estate market is no longer measured by square footage alone, but rather in the quality of workplace experience and flexibility that buildings can offer.

Positioning Malaysia as a hub for high-value industries and global talent

The Ministry of Finance has indicated that Budget 2026 will prioritise high-value projects. For these projects to succeed, they require additional support, aside from land and incentives. They need vibrant ecosystems where companies can move in quickly with less hassle, talent can flow seamlessly, making innovation and collaboration across industries possible.

This is exactly where flexible coworking environments are positioned to play this role. The availability of agile workspace infrastructure will determine how fast these industries can grow in Malaysia, as the government is now targeting higher-value sectors such as digital technology, renewable energy, and advanced manufacturing.

WORQ’s network of spaces has proven that when high-growth companies share proximity with established corporations, this results in new partnerships, knowledge exchange, and even higher local economic participation.

Innovation and transit-oriented development as key drivers

Today, the Malaysian flexible workspace market is projected to grow at a compound annual growth rate of 8.83 per cent by 2033. These numbers reflect the global shift towards hybrid and agile work models, which are proven to lift productivity while giving businesses cost-efficient access to premium locations.

Industry estimates suggest that less than 2 per cent of Kuala Lumpur’s office market is offered flexibly, which is far below the Asia-Pacific average of around 4 per cent, even as hybrid work gains momentum. Up to 30 per cent of employees are looking for work options that provide flexible work and hybrid work.

With the Malaysian commercial real estate market projected to reach USD 12.83 billion by 2031, embedding flexible workspace infrastructure within these developments ensures this growth is both in scale and quality of the space.

Our experience shows that when flexible workspaces are thoughtfully integrated into commercial developments, they can evolve into dynamic environments where businesses of all sizes learn, grow, and innovate harmoniously.

The integration of Transit-Oriented Developments (TOD) is another integral element redefining Malaysia’s workforce mobility. It is shown that by creating more shared facilities and community centers around transit hubs, commuters are realising the benefits of using public transit as opposed to spending hours of their day in traffic jams and looking for parking. The convenience and affordability of TOD coworking spaces has resulted in 50 per cent of WORQ’s community members shifting their primary mode of transport from cars to public transit. This behavioural shift illustrates the broader benefits of improved urban connectivity on cost, well-being, and sustainability.

By placing flexible workspaces within TOD hubs, companies can attract and retain talent more effectively, while foreign investors benefit from easier access for international employees. This network of strategically located offices not only supports ESG goals but also strengthens Malaysia’s position as a convenient and competitive base for high-value industries.

Technology remains a key enabler of this transformation. From smart booking systems to high-speed connectivity and energy-efficient design, digital integration has become the new benchmark for competitiveness in the property sector.

With Budget 2026’s focus on digitalisation and the New Industrial Master Plan (NIMP 2030), Malaysia must ensure its property industry keeps pace by incentivising developers to adopt advanced digital systems and ESG-compliant building standards; both of which are critical in attracting quality foreign direct investments (FDI) into Malaysia’s real estate and technology-driven sectors.

Integrating housing and workspace development for future communities

Housing reform is another major focus of Belanjawan 2026, which intersects with this vision. As hybrid and remote work continue to redefine global labour markets, there is a clear opportunity to design residential projects that integrate coworking facilities and digital amenities. For example, such developments help raise property value while simultaneously enhancing quality of life by reducing commute times and fostering “neighbourhood-based” ecosystems for productivity.

Co-living and integrated residential-workspace models are gaining traction as younger professionals seek affordability, flexibility, and community. Aligning housing development incentives with these modern workforce needs is crucial for Malaysia to future-proof its housing strategy and, at the same time, boost domestic productivity and local entrepreneurship.

Expanding public–private partnerships to scale inclusive growth

WORQ’s collaboration with a government-linked company (GLC) in deploying coworking spaces in their office developments demonstrates how shared investment between public and private entities in flexible workspace infrastructure can deliver sustainable and long-term returns.

Since launch, our partnership spaces have consistently maintained high occupancy, which reflects the demand for flexible and collaborative work environments and underscoring the value of integrating workspace infrastructure into broader property developments.

At the same time, we cannot deny that the near-term relief for entrepreneurs and SMEs is also important. Many of them still face challenges accessing affordable, strategically located spaces. Simplifying setup processes, offering targeted grants and incentives, and even expanding coworking hubs across key growth corridors would help reduce barriers for new businesses and channel resources into innovation rather than overheads.

By weaving together housing reform, digital integration, and ecosystem-driven development, Malaysia can strengthen its position as a regional hub for talent and investment.

As Malaysia continues to scale greater heights with Belanjawan 2026, we stand ready to support this vision because property is much more than concrete and glass; it is the foundation upon which our economic future will be built.