THE composition of global FDI is increasingly being reshaped by digital infrastructure. Within this competitive global arena, Malaysia successfully secured a spot as a top ten global destination for data centre projects.
For Malaysia, this massive capital positioning represents a significant transition from traditional manufacturing FDI toward high-value, technology-intensive assets that directly support national digitalisation and long-term capital formation.
Malaysia’s Top Ten Global Malaysia secured RM92.8 bil in approved investments for 1QCY26, underscoring strong economic resilience amid global geopolitical uncertainty.
Selangor remained the country’s leading investment destination in the first quarter of 2026, attracting a record RM33.5 bil in approved investments.
Johor and Kuala Lumpur followed closely, each securing RM16.9 bil, while Penang and Sarawak rounded out the top five with RM6.2 bil and RM4.0 bil respectively.
The dominance of Selangor, Johor and Kuala Lumpur highlights their growing importance as regional data centre hubs.
Each location offers distinct advantages, with Cyberjaya benefiting from its mature digital ecosystem, Johor capitalising on its proximity to Singapore, and Kuala Lumpur serving as the nation’s key financial and connectivity centre.
At the same time, authorities are taking a more measured approach towards new data centre investments.
Through its Data Centre Task Force, the Malaysian Investment Development Authority (MIDA) is placing greater emphasis on projects that meet sustainability requirements and demonstrate long-term value creation, rather than focusing solely on rapid development timelines.
The expansion of data centres has been a significant catalyst for Malaysia’s construction sector, particularly in the non-residential segment.
Demand for specialised equipment has also contributed to strong capital goods imports over recent years. However, growth in these imports has moderated in recent months, reflecting stricter assessment criteria for new data centre projects.
“Moving into the operating phase, we expect these data centres will offer opportunities for high-skilled jobs,” said MBSB.
This is in line with the government aspiration to attract investments that will create high-paying high-skilled employment in Malaysia.
With total approved investment of RM144.4 bil for 143 datacentre and cloud investment projects between 2021 and June 2025 as reported by MIDA, the industry could create around 30,000 to 40,000 jobs, both involved directly in the data centre operations and indirectly involved in the digital economy-related works.
This could boost Malaysia’s employment by nearly +0.2% based on the recent size of total employment. Employees in the data centre industry are normally well-paid, given their highly specialised roles.
Senior and experienced hires could earn on average between RM10,000 to RM30,000 a month, while junior or entry-level jobs could earn RM3,000 to RM7,000 a month.
In another study, BNM estimated that the data centre boom could contribute positive impacts on investment, consumption and ICT services amounting to +RM14.1 bil (or around +1.0%) to Malaysia’s real GDP in 2025.
Property companies with sizeable land banks across multiple locations possess a competitive advantage in data centre development in Malaysia. This position them well to accommodate varying site requirements from data centre investors.
Some developers choose to monetise their land through outright sales to generate immediate gains. Meanwhile, land transaction activity in Johor has been robust in recent years, driven by land sales for data centre developments.
Notably, land transaction prices in Johor have been on an upward trend. We believe data centre development will be a key driver of land value growth in Malaysia in the coming years, particularly for strategically located land banks in Malaysia. —June 24, 2026
Main image: AFP
