Tengku Zafrul: Selangor, Johor lead investment as real estate records RM33.5b

PETALING JAYA (Aug 29): Selangor and Johor emerged as Malaysia’s leading investment destinations in the first half of 2026 (1H2026), as Malaysian Investment Development Authority (Mida) chairman Tengku Datuk Seri Zafrul Abdul Aziz highlighted services and manufacturing as the country’s two main investment engines.

The two states accounted for RM129.4 billion, or about 59.2%, of Malaysia’s RM218.5 billion in approved investments, while the real estate subsector recorded RM33.5 billion in approved investments during the period.

Selangor led all states with RM70 billion in approved investments across 835 projects, followed by Johor with RM59.4 billion, Mida said in a statement on Friday (Aug 28).

“The half-year performance is powered by our two largest economic engines — services and manufacturing sectors, and both showcase quality, not just scale of investments,” Zafrul said.

Mida said Selangor’s services sector attracted digital investments in areas including artificial intelligence (AI), big data analytics, cybersecurity, financial technology, cloud computing and the Internet of Things.

Johor’s performance, meanwhile, was supported by the Johor-Singapore Special Economic Zone (JS-SEZ) and the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link, it said.

W.P. Kuala Lumpur ranked third with RM26.6 billion in approved investments, including residential and serviced apartment developments linked to urban growth, transit-oriented development (TOD) and demand for more accessible housing.

Penang followed with RM20.2 billion, led by advanced manufacturing and semiconductors, while Sarawak recorded RM10.8 billion, mainly from offshore oil and gas exploration projects.

Real estate records RM33.5b in approved investments

The real estate subsector recorded RM33.5 billion in approved investments in 1H2026, forming part of the RM149.6 billion attracted by the services sector.

Services accounted for 68.5% of Malaysia’s total approved investments and recorded 21% year-on-year growth. The sector comprised 1,750 projects expected to create 34,475 jobs.

Foreign approved investments in services rose 66.7% to RM86.9 billion, while domestic approved investments totalled RM62.7 billion.

Zafrul said services growth was led by digital and information technology investment, which was helping to build the foundation for Malaysia’s AI Nation 2030 ambitions while creating opportunities across the wider economy.

Overall, Malaysia recorded RM218.5 billion in approved investments across 2,746 projects in the services, manufacturing and primary sectors in 1H2026, up 11.7% from RM195.5 billion a year earlier.

The projects are expected to create 99,030 jobs. Foreign approved investments contributed RM126.9 billion, or 58.1% of the total, while domestic approved investments amounted to RM91.6 billion, or 41.9%.

Data centres remain major investment driver

Digital infrastructure remained a major contributor, with the information and communications subsector recording RM103.3 billion in approved investments, up 68.2% year on year.

Of this, data-centre and cloud-computing projects accounted for RM95.8 billion, or close to 44% of all approved investments during the six-month period, as regional demand for AI computing power continued to grow, according to Mida.

Mida said the Data Centre Task Force, established to streamline data-centre investment approvals, considers projects with secured power and water supply and demonstrable green compliance, while giving priority to operators that support the local supply chain.

Looking ahead, Mida was reviewing 227 investment proposals worth RM72.1 billion as at Aug 10, comprising 128 services proposals worth RM36.5 billion and 99 manufacturing proposals worth RM35.6 billion.

A further RM58.4 billion in high-potential investment leads was under discussion, with the pipeline concentrated in semiconductors, AI infrastructure, renewable energy and medical devices.

Mida CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid said securing investment commitments was only part of the process, with approved projects still needing to be translated into operating facilities and employment.

“Securing the commitment is only half the task; the other half is turning it into operating plants and jobs on the ground,” he said.

Sikh Shamsul said Mida works with ministries and agencies through the Invest Malaysia Facilitation Centre (IMFC) to help investors overcome regulatory and implementation hurdles, while seeking to deepen the participation of Malaysian SMEs and local vendors in approved projects.

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