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

KUALA LUMPUR (Aug 13): Malaysia’s property market is being reshaped by the rapid expansion of data centres, semiconductor manufacturing and industrial capital expenditure, with investors increasingly looking beyond conventional real estate plays to identify where the biggest growth opportunities will emerge.

The country’s position as one of Southeast Asia’s top four emerging economies is also fuelling interest in data centre-ready real estate, particularly in Johor, a frontrunner, riding on the momentum of the Johor–Singapore Special Economic Zone (JS-SEZ).

Malaysia is well positioned to support the data centre sector, with available talent, grid-ready power at scale and a mature back-end semiconductor manufacturing base.

These structural shifts were the focus of the 2026 Real Estate Forum, “Riding the Mega-Trends: Who Gets the Biggest Slice?”, organised by Kenanga Investment Bank Bhd on Aug 12).

The one-day forum held at Imperial Lexis, Kuala Lumpur, brought together a distinguished lineup of industry experts, including Malaysian REIT Managers Association founding chairman (2010–2015) Datuk Stewart LaBrooy and EdgeProp’s head of research Kee Hock Im, to discuss where the highest-value opportunities lie within these emerging trends.

The consensus among speakers was clear: as data infrastructure and high-tech manufacturing reshape land use and capital allocation across the country, investors who position themselves ahead of these macroeconomic mega-trends stand to capture the largest slice of Malaysia’s next phase of real estate growth.

According to LaBrooy, who is also AREA Real Estate Advisory Sdn Bhd founder and director, while data centres themselves may not generate the largest number of jobs, they can create a broader economic spillover by driving demand for the infrastructure and industries that support them.

“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. Data centres need chips to run. This is where its worth comes from. Its value is in the supply side.

“The people who create the data — that’s where the money is. We have to develop industries like plumbing for data centre infrastructure for data centres to grow,” LaBrooy added.

Daniele Gambero, a property economist who refers to 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 looking to capitalise on the shift, Gambero said the opportunity is not simply a matter of accumulating land, but identifying assets with the right characteristics.

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

M40 struggling to own homes

While data centres and industrial development are creating new opportunities, speakers also highlighted the need to address affordability in the residential market, particularly for Malaysia’s middle-income households.

Real Estate and Housing Developers’ Association of Malaysia (Rehda) Institute director of research Malathi Thevendran presented the case for greater focus on affordability, pointing to the growing squeeze on the M40 group, which she said is now facing greater pressure than the bottom 40% (B40).

With elevated property prices and reduced purchasing power, the M40 can find 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 the institute, M40 homeownership has fallen to 75.9%, below the B40 rate of 76.3%.

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Malathi said the issue ultimately comes down to allowing market forces to work while ensuring those who genuinely need assistance continue to receive it.

“Historically, it has been fine, that you needed to help them (the lower income groups),” she said, referring to the cross-subsidy borne by the open market buyers, a strategy used by private developers to meet the 30% affordable housing quota imposed by the government for every private housing development.     

“But if you look at the numbers, we’re at 78%. We have achieved it. The rest of the 22% may not want to own a home and that’s okay because they have other priorities. 

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

Bright sparks amidst broader gloom

On the residential property market, Kee said demand remained highly fragmented and localised, meaning a broader market slowdown did not necessarily 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, pointing to Penang as an example, with RM3 million homes selling out in areas like Pulau Andaman and The Light City in the northeast (Timur Laut) district. 

The picture is markedly different in Batu Feringghi, a sub-district of Timur Laut, where the market has experienced stagnation, with no new projects launched since 2017.

Johor, meanwhile, remains one of the key markets benefitting from the convergence of industrial, data centre and cross-border economic activity.
Iskandar Regional Development Authority (IRDA) vice-president Zaihan Johani shared insights into the factors driving demand in the state, including the region’s integrated property development and special financial zone (SFZ) at Forest City, nestled in Iskandar Puteri.

The key takeaway from the forum is that the developments point to a property market that is becoming increasingly intertwined with Malaysia’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.

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