Malaysia’s data centre industry is entering a second wave of expansion, with major developments in Negeri Sembilan, Selangor and Johor expected to support construction sector growth amid slower roll-outs of public infrastructure projects.
Kenanga Investment Bank said the latest wave of data centre investments represents an estimated pipeline of 17 to 21 data centre structures, with up to four new project roll-outs expected in the remaining months of 2026.
The research house maintained its “overweight” view on the construction sector, supported by strong long-term demand for data centres and continued capital expenditure commitments from global technology companies.
National electricity utility company Tenaga Nasional Bhd has continued to see strong demand from the data centre sector, signing energy supply agreements for three additional data centre projects in the first quarter of 2026. This brings the total number of related projects supported by the company to 59, with 36 projects already completed.
According to data from the Construction Industry Development Board, Malaysia recorded RM108 billion worth of awarded projects in the first six months of 2026, compared with RM125 billion during the same period in 2025.
More than two-thirds of the project value during the first half of 2026 came from commercial and industrial developments, while infrastructure projects contributed only about 12% of total awards.
Kenanga noted that matching the strong project award levels achieved in 2025 would be challenging. However, the construction sector is still expected to secure around RM180 billion worth of projects throughout 2026, supported by ongoing government initiatives and continued private sector investment, particularly in data centre developments.
The investment bank expects data centre projects to remain the key growth driver for the construction industry in 2026, with a strong development pipeline extending towards 2030.
For investment exposure to the sector, Kenanga highlighted large-cap construction companies including Gamuda Bhd, Sunway Construction Group Bhd and IJM Corporation Bhd, which are positioned to benefit from sustained data centre activity and a healthy pipeline of future projects.
What I Learned
Malaysia’s data centre expansion is becoming a major growth catalyst for the construction and industrial sectors. The increasing demand from global technology companies is creating opportunities not only for construction firms but also for supporting industries such as power supply, industrial land development, engineering services and infrastructure providers.
The shift towards data centre-led growth shows that Malaysia is strengthening its position as a regional digital infrastructure hub, especially in key locations such as Johor, Selangor and Negeri Sembilan. For the property and industrial market, this trend could increase demand for strategic industrial land, high-specification facilities and supporting commercial developments surrounding data centre clusters.
Malaysia