Johor Surpasses Singapore as Malaysia’s Growth Engine, Fueled by SEZ and Data Center Boom: DBS Report
JOHOR BAHARU, Malaysia – Johor is outpacing Singapore as a key driver of Malaysia’s economic growth, according to a recent report by DBS. The southern Malaysian state accounted for 30% of all investments in Malaysia during the first half of 2025, spurred by the Johor-Singapore Special Economic Zone (JS-SEZ) and a surge in data center investments.
Malaysia is targeting 6% growth in private investment from 2026 to 2030, aiming for high-income status, compared to 3.6% growth in public investment.foreign investment continues to flow into Malaysia, averaging over 50% of total investment over the past three years, with Singapore as the leading source, contributing 40% of all foreign investments in the first half of 2025.
Johor has emerged as a “hotspot” for data centers, attracting important investment. singapore-based Princeton digital – backed by Warburg Pincus – launched a US$1.5 billion data center in Johor last year, joining companies like Nvidia and Microsoft.
The JS-SEZ is identified as a key catalyst for this investment. Growth in Johor’s services sector is driving a larger portion of overall investments in the state, positioning it as the second-ranked Malaysian state in construction activity, accounting for 18% of national construction activity in the first half of 2025. The boom in data centers is a primary driver of Johor’s “strong expansion” in construction work, notably in the non-residential segment.
DBS’s report highlights that Malaysia’s non-residential construction work is primarily driven by Johor,”underscoring Johor’s importance in Malaysia’s ongoing progress to high-income nation status.”
