Of data centres and semiconductors: Who gets the biggest slice of Malaysias next property boom?

KUALA LUMPUR, 14 AUGUST 2026 —

Malaysia’s Property Boom Shifts to Data Centres and Semiconductors as Investors Chase Next Growth Wave

The country’s status as one of Southeast Asia’s top four emerging economies is amplifying interest in data centre-ready real estate, particularly in Johor, which is emerging as a frontrunner. The momentum is fuelled by the Johor–Singapore Special Economic Zone (JS-SEZ), positioning the state as a key beneficiary of cross-border economic activity.

Malaysia’s competitive edge in supporting the data centre sector lies in its available talent pool, grid-ready power infrastructure at scale and a mature back-end semiconductor manufacturing base. These structural shifts were the focal point of the 2026 Real Estate Forum, titled “Riding the Mega-Trends: Who Gets the Biggest Slice?”, organised by Kenanga Investment Bank Bhd on Aug 12.

The one-day event, held at Imperial Lexis in Kuala Lumpur, convened industry leaders, including Malaysian REIT Managers Association founding chairman (2010–2015) Datuk Stewart LaBrooy and EdgeProp’s head of research Kee Hock Im. Panellists explored where the highest-value opportunities lie within these emerging trends, with a consensus that investors positioning themselves ahead of these macroeconomic shifts stand to capture the largest share of Malaysia’s next real estate growth phase.

LaBrooy, who is also founder and director of AREA Real Estate Advisory Sdn Bhd, emphasised that while data centres themselves may not generate the largest number of jobs, their economic spillover effect is significant. He highlighted the infrastructure supporting data centres—such as cooling systems, water plants and power supply—as the true value drivers.

“Data centres need chips to run. The value is in the supply side—the plumbing system, chip manufacturing and power. The people who create the data are where the money is,” LaBrooy said. “We have to develop industries like plumbing for data centre infrastructure for them to grow.”

Property economist Daniele Gambero, known as a “propenomist” and president of the Malaysia Proptech Association, projected that the data centre boom will create 33,000 new high-skilled jobs by 2030. He stressed that human involvement remains critical for higher-level decision-making roles.

“Data centres are not fully automated. Humans are still required for the higher-level, decision-making jobs,” Gambero said. He added that investors should focus not just on land acquisition but on identifying assets with the right characteristics—prime locations, suitable nodes and optimal lease structures.

“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 will ultimately determine who gets the biggest slice of the pie.”

While data centres and industrial development present new opportunities, speakers also underscored the need to address affordability in Malaysia’s residential market, particularly for middle-income households. Real Estate and Housing Developers’ Association of Malaysia (Rehda) Institute director of research Malathi Thevendran highlighted the growing squeeze on the M40 group, which she said now faces greater financial pressure than the bottom 40% (B40).

With elevated property prices and reduced purchasing power, the M40 group finds itself in a difficult position: earning too much to qualify for some forms of government assistance but still struggling to afford a home. According to Rehda Institute data, M40 homeownership has declined to 75.9%, slightly below the B40 rate of 76.3%.

Malathi argued that while historical policies have focused on assisting lower-income groups, the current market dynamics require a more nuanced approach. She noted that Malaysia has already achieved the 30% affordable housing quota imposed on private developers, with 78% of the target met.

“The rest of the 22% may not want to own a home, and that’s okay because they have other priorities,” she said. “What is then optimal? Don’t push people when they don’t need it.”

On the residential property market, Kee Hock Im of EdgeProp observed that demand remains highly fragmented and localised, meaning a broader market slowdown does not necessarily translate into weakness across every segment or location. He cited Penang as an example, where high-end properties such as RM3 million homes in areas like Pulau Andaman and The Light City in the northeast district have sold out.

However, the market in Batu Feringghi, a sub-district of Timur Laut, has stagnated, with no new projects launched since 2017. Johor, meanwhile, continues to benefit from the convergence of industrial, data centre and cross-border economic activity. Iskandar Regional Development Authority (IRDA) vice-president Zaihan Johani highlighted the state’s integrated property development and special financial zone (SFZ) at Forest City in Iskandar Puteri as key drivers of demand.

The overarching takeaway from the forum is that Malaysia’s property market is becoming increasingly intertwined with the country’s broader economic transformation. Rather than a uniform property cycle, the next phase is likely to be defined by pockets of concentrated demand—from land surrounding data centre infrastructure and semiconductor clusters to industrial corridors, high-value residential nodes and cross-border economic hubs.

For investors, the message is clear: the biggest opportunities will go to those who can identify and capitalise on these emerging trends before they fully materialise.

Related: Kuala Lumpur