Johor strengthened its position as Malaysia’s second-largest residential property market in 2025, trailing only Selangor, based on both transaction volume and total value. During the third quarter of the year, the state recorded approximately 10,500 residential transactions with a combined value of RM5.49 billion, reflecting sustained buyer interest despite broader market consolidation.

By comparison, Selangor continued to lead the national market with 14,560 transactions valued at RM8.47 billion, while Kuala Lumpur registered 3,789 deals worth RM3.45 billion. Penang followed with 4,614 transactions totaling RM2.13 billion, highlighting Johor’s growing relevance as a major residential and investment destination.

According to JLL Malaysia, Johor’s relative outperformance has been underpinned by the rollout of the Johor–Singapore Special Economic Zone (JS-SEZ), alongside extensive infrastructure upgrades and improved cross-border connectivity. These initiatives have helped offset softer sentiment seen in other parts of the country, including certain mature urban areas such as commercial property in KL and high-density townships in the Klang Valley.

That said, year-on-year figures suggest a period of recalibration. Residential transaction volume declined by around 17%, while total value eased by approximately 6%, indicating a more measured market following the post-pandemic surge.

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Industrial Land Values Continue to Climb

Johor’s industrial property segment remains a key growth driver, supported by sustained demand from logistics operators, manufacturers, and data centre-related supply chains. Industrial land prices across strategic corridors — including Iskandar Puteri–Tanjung Pelepas and Kulai–Senai — continued their upward trajectory in 2025.

Average industrial land values reached RM86 per sq ft, representing an 8.4% increase year-on-year. This steady appreciation, ongoing since 2020, suggests the market has largely stabilised after earlier economic disruptions.

Well-established industrial hubs such as SiLC Nusajaya, Senai Industrial Park, i-Park@Indahpura, Pasir Gudang Industrial Park, and Tanjung Langsat continue to attract occupiers from sectors including electronics, logistics, automotive, medical manufacturing, FMCG, and data centre support services.

Similar trends are also evident closer to the Klang Valley, where demand for industrial land in Selangor, factories in Puchong, and industrial property in the Subang area remains resilient due to supply constraints and proximity to ports, highways, and labour pools.

While rental growth in Johor’s industrial segment is expected to be moderate in 2026 due to incoming supply, occupancy levels remain healthy. Landlords are increasingly offering flexible incentives to secure long-term tenants, mirroring competitive dynamics seen in mature logistics markets around Shah Alam, Subang Jaya, and Klang.

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Nusajaya and Sedenak Gain Prominence as Data Centre Locations

Johor’s transformation into a regional data centre hub has further reinforced demand for industrial land. Nusajaya has emerged as a premium location due to its close proximity to Singapore via the Tuas Second Link, making it attractive for hyperscalers and international operators.

Meanwhile, Sedenak is now home to one of Southeast Asia’s largest purpose-built data centre parks, supported by dedicated power and water infrastructure. Phase 1 is fully operational, with Phase 2 expected to commence soon. The nearby Kulai area is also gaining attention, driven by large-scale developments such as YTL Corp’s planned 500-MW data centre campus, intended to support global technology players.

However, the rapid concentration of data centres has placed considerable strain on existing utilities. Many industrial zones were not originally designed to accommodate the power and water intensity required by data centre operations, necessitating substantial infrastructure upgrades.

As a result, operators are actively exploring alternative locations across Johor — including Tebrau, Ulu Tiram, and Pasir Gudang — to diversify capacity. This decentralisation trend echoes similar planning considerations now being discussed for future data centre-ready industrial land in Selangor and selected parts of Greater Kuala Lumpur.

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Long-Term Outlook Remains Positive

Malaysia’s data centre and industrial sectors are currently undergoing a phase of strategic consolidation, as new capacity comes online and supporting infrastructure is enhanced. While this may result in short-term adjustments, the long-term outlook remains firmly positive.

Key growth drivers — including regional digitalisation, cloud adoption, and the rapid expansion of artificial intelligence — continue to generate strong demand for high-performance computing facilities. These fundamentals are expected to support sustained investment interest not only in Johor, but also in industrial land in Selangor, as well as office space in Bukit Jalil and other emerging business districts within Kuala Lumpur.

Looking ahead, deeper collaboration between the public and private sectors will be critical to ensuring sustainable growth. With the right balance of infrastructure planning, policy support, and strategic land use, Malaysia’s industrial and data centre ecosystem is well positioned for long-term expansion beyond the current market adjustment phase.