Data centres, semiconductors reshape Malaysia’s property sector

KUALA LUMPUR, 14 AUGUST 2026 —

Malaysia’s property market is pivoting toward data-centre infrastructure and semiconductor plants, with Johor positioned as the biggest beneficiary, speakers at the 2026 Real Estate Forum in Kuala Lumpur said.

According to Malaysian REIT Managers Association founding chairman (2010–2015) Datuk Stewart LaBrooy, data centres do not generate the largest number of jobs but create broader economic spillover by driving demand for supporting industries.

“The data centre’s value is in the infrastructure that holds it — the plumbing system for cooling towers and water plants, chip manufacturing and power,” LaBrooy said. “Data centres need chips to run. This is where its worth comes from. Its value is in the supply side.”

Property economist Daniele Gambero, who describes himself as a “propenomist”, said the spillover from the data-centre boom will create 33,000 new high-skilled jobs by 2030.

“Data centres are not just automated. Humans are still required for the higher-level, decision-making jobs,” said Gambero, who is also Malaysia Proptech Association president and Pivott, Because Costs Matter co-founder and CEO.

For investors, the opportunity lies not in owning the most land but in securing the right assets, Gambero said.

“It is not about who owns the most land, but who has the right land, at the right node and right lease,” he said. “These factors determine who gets the biggest slice of the pie.”

Johor is emerging as the focal point of this shift. The state sits at the heart of the Johor–Singapore Special Economic Zone and hosts the Iskandar Regional Development Authority’s special financial zone at Forest City in Iskandar Puteri.

Iskandar Regional Development Authority vice-president Zaihan Johani said Johor remains one of the key markets benefitting from the convergence of industrial, data-centre and cross-border economic activity.

“Johor is benefiting from the convergence of industrial, data-centre and cross-border economic activity,” Johani said.

While data centres and industrial development generate new demand, speakers also warned that affordability remains a challenge for Malaysia’s middle-income households.

Malathi Thevendran, director of research at the Real Estate and Housing Developers’ Association of Malaysia (Rehda) Institute, said the M40 group now faces greater pressure than the bottom 40% (B40). Rehda data shows M40 homeownership has fallen to 75.9%, compared with 76.3% for the B40.

“The issue ultimately comes down to allowing market forces to work while ensuring those who genuinely need assistance continue to receive it,” she said.

Historically, developers met the 30% affordable housing quota through cross-subsidies funded by open-market buyers. Thevendran said the quota is now 78% and the remaining 22% may not want to own a home.

“What is then optimal? Don’t push people when people don’t need it,” she said.

EdgeProp head of research Kee Hock Im said demand remains fragmented and localised, meaning a broader market slowdown does not translate into weakness across every location or segment.

“The market may be slowing down, but there will be pockets that will continue to thrive,” he said.

Kee pointed to Penang, where RM3 million homes sold out in areas like Pulau Andaman and The Light City in the northeast district. In contrast, Batu Feringghi in the same district has seen stagnation, with no new projects launched since 2017.

The forum concluded that the next phase of Malaysia’s property growth will be defined by concentrated demand around data-centre infrastructure, semiconductor clusters and industrial corridors, rather than a uniform national cycle.

Investors who position themselves ahead of these macro-trends stand to capture the largest slice of the market, speakers said.

Related: Kuala Lumpur