Second wave of data centre boom is here, says Kenanga, as infrastructure projects slow

KUALA LUMPUR (July 8): The second wave of the data centre boom is here in Malaysia, said Kenanga Investment Bank, coming just as roll-outs of public infrastructure projects slowed.

New mega-campuses in Negeri Sembilan, Selangor, and Johor represent an estimated pipeline of 17 to 21 data centre structures, with up to four project roll-outs anticipated in the remaining months of 2026 alone, the research house said in a construction sector note on Wednesday.

Kenanga is keeping its ‘overweight’ rating on the sector, “structurally underpinned by persistent demand for data centres and sustained capex commitments from global tech giants through 2026”.

National electric utility firm Tenaga Nasional Bhd (KL:TENAGA) has signed energy supply agreements for another three data centres in the first three months of 2026, bringing the total to 59 projects, of which 36 projects are already completed.

Malaysia saw projects worth RM108 billion awarded in the first six months of 2026, compared to RM125 billion in the same period last year, according to the Construction Industry Development Board. More than two-thirds of the project in the first half of the year were commercial and industry projects while infrastructure accounted for just 12% of the value of the awards.

Matching the pace in 2025 “remains a tall order”, Kenanga said, though there would still be RM180 billion worth of jobs this year, supported by continued public-sector roll-outs and sustained private-sector momentum, particularly in data centres.

“With a healthy pipeline of near-term awards and a development cycle extending to 2030, we expect data centre projects to remain the primary growth driver for the sector in 2026,” the house added.

For strategy, the house picks large-cap Gamuda Bhd (KL:GAMUDA), Sunway Construction Group Bhd (KL:SUNCON) and IJM Corporation Bhd (KL:IJM) for exposure to the sustained data centre activity and the solid project pipeline.

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