The Malaysia Market Outlook Seminar 2025, hosted by Knight Frank Malaysia (KFM) in collaboration with the Asia Pacific Real Estate Association (APREA) and UEM Sunrise, highlighted some key points on foreign investment opportunities in Malaysia's industrial and data centre sectors.

Sigrid Zialcita, CEO of APREA, said, "The rise of Malaysia, particularly Johor, as a prime destination for industrial and digital infrastructure investment underscores its growing importance in the regional economy. With the Johor-Singapore Special Economic Zone creating new avenues for growth, Malaysia is poised to attract more institutional capital, reinforcing its position as a strategic gateway to Southeast Asia."

Lee Kun Thye, Director and Head of the Johor Branch, Knight Frank Malaysia, noted on Malaysia's growing appeal as a prime destination for foreign direct investment (FDI), fueled by infrastructure development, government incentives, and the country's rising prominence in the digital economy.

Meanwhile, Md Eharay Abd Majid from Invest Malaysia Facilitation Centre Johor (IMFC-J) highlighted Johor's rapid economic growth, with a strong focus on the Johor-Singapore Special Economic Zone (JS-SEZ). He emphasized how the JS-SEZ will enhance cross-border trade, attract high-value investments, and further solidify Malaysia's position as a global investment hub.

Johor: A Rising Investment Hub

Johor has rapidly emerged as a key player in Malaysia's economic landscape, with its proximity to Singapore and robust industrial ecosystem positioning it as a global investment destination. The state has seen increased interest from multinational corporations looking to expand operations, particularly in manufacturing, logistics, and technology-driven sectors.

Lee emphasised that "Johor's industrial market is evolving rapidly, supported by strong government initiatives and infrastructure growth. The state's strategic location, coupled with competitive incentives especially under the JS SEZ, makes it an attractive proposition for investors looking at long-term growth in Southeast Asia."

The Data Centre Boom: Unlocking Malaysia's Digital Potential

Malaysia's data centre market has been experiencing exponential growth, driven by the rise of cloud computing, artificial intelligence, and digital transformation, with 78.6% of the operational IT capacity in Johor where this is expected to breach the 1GW threshold in the next few years upon completion of the pipeline supply. The seminar featured a dedicated session on "Unlocking Opportunities in Malaysia's Booming Data Centre Ecosystem," highlighting the increasing demand for data infrastructure and Malaysia's strategic role in meeting this global need.

Knight Frank Malaysia reinforced that Johor is well-positioned to become a leading data centre hub, backed by its access to land, power availability, and government-backed incentives that support digital infrastructure investment. Sustainability also remains a key priority, with a growing emphasis on green data centres and renewable energy integration to align with global ESG goals. Additionally, with the government's push towards AI-driven data centres, Malaysia is gearing up to support the next generation of high-performance computing, further solidifying its position as a key player in the region's digital economy.

Government Incentives and Policies Attracting Investors

The Malaysian government has been proactive in rolling out policies that encourage foreign investment in high-growth sectors. The seminar also highlighted the incentives available under the Johor-Singapore Special Economic Zone (JS SEZ), which offer significant benefits for businesses looking to establish a presence in Johor. In addition to tax incentives, grants, and facilitation programs designed to support investors in the industrial and data centre markets, the JS SEZ framework provides streamlined regulatory processes, cross-border trade facilitation, and enhanced infrastructure support, making Johor an even more attractive destination for digital and industrial investments.

With infrastructure developments, digital transformation, and pro-business policies in place, the country continues to be an attractive destination for global investors.