Johor leads Malaysia’s RM285 billion investment surge in 9M 2025
The country’s overall approvals are up 13% year on year
[KUALA LUMPUR] Johor dominated Malaysia’s investment landscape in the first nine months of 2025, securing RM91.1 billion (S$28.6 billion) in approved investments – the highest among all states – as the country recorded a stronger-than-expected RM285.2 billion in total approvals.
The state’s outperformance was driven by the deepening momentum of the Johor-Singapore Special Economic Zone (JS-SEZ) and its growing role as a regional manufacturing and digital hub.
Malaysia’s overall investment approvals rose 13 per cent on the year, reflecting resilience amid a challenging global backdrop marked by geopolitical tensions, disrupted supply chains and tighter financial conditions.
The approved projects across manufacturing, services and primary sectors are expected to generate about 152,766 jobs.
This continued growth builds on a multiyear upward trend. In 9M 2024, Malaysia secured RM254.7 billion in approved investments – a 10.7 per cent increase from RM230.2 billion in 2023.
Minister of Investment, Trade and Industry Tengku Zafrul Aziz said the performance underscored Malaysia’s competitive position in South-east Asia.
“The RM285.2 billion in nine months is exceptional by any measure. While global capital flows are contracting elsewhere, Malaysia continues to attract quality investments at scale,” he said.
“This reflects investors’ confidence in our political stability and economic vision. When global investors look at South-east Asia, they are increasingly choosing Malaysia.”
From fifth to first
Johor’s tally far surpassed that of second-place Selangor (RM51.9 billion) and Kuala Lumpur (RM45.9 billion), which came in third.
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Penang and Kedah secured RM23.7 billion and RM17.5 billion, respectively, supported by electronics clusters and northern development initiatives.
Johor has experienced a significant surge in its appeal as an investment destination. During 9M 2024, Johor captured RM18.1 billion, coming in fifth behind Selangor (RM66.8 billion), Kuala Lumpur (RM63.9 billion), Kedah (RM34 billion) and Pulau Pinang (RM22.6 billion).
The southern state’s ascent is closely tied to its transformation into a regional data-centre and advanced manufacturing hub.
Knight Frank Malaysia in September reported that Johor has “firmly established itself as South-east Asia’s fastest-growing data-centre market”, with aggregate supply nearly doubling over 12 months to 5.8 gigawatts (GW) as at the second quarter of 2025.
The expansion is supported by the national Data Centre Planning Guidelines and strong investor facilitation at the federal and state levels. Johor now anchors the Asia-Pacific’s record-breaking pipeline of new data-centre announcements, which surged 160 per cent year on year to 13 GW in the first half of 2025.
In early November, US tech giant Microsoft unveiled plans for Southeast Asia 3, its second cloud region in Malaysia, to be developed in Johor Bahru. This comes as part of the tech giant’s US$2.2 billion investment in the country.
Broader infrastructure upgrades are also accelerating property and commercial activity.
In a report, UOB Kay Hian analyst Ng Jo Yee said Johor’s rising industrial and commercial momentum is being strengthened by the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link.
The 4 km rail line, which is expected to be operational by the end of 2026, is boosting property take-up, improving cross-border connectivity and increasing Johor’s attractiveness as a residential and investment destination.
OCBC senior Asean economist Lavanya Venkateswaran said Johor’s logistics, tourism and manufacturing growth has boosted the state’s economic trajectory.
She expects the roll-out of Special Tourism Investment Zones (STIZ) in Johor, Melaka, Negeri Sembilan and Sarawak from 2026 to attract additional private investment and elevate tourism-led growth.
Singapore remains largest investment source
Across Malaysia, foreign investment remained a key driver, rising 47.5 per cent year on year to RM150.8 billion and slightly surpassing domestic investments.
Gains were recorded across all major sectors, led by a surge in services and primary industries.
Singapore was the largest foreign investor with RM52.7 billion, followed by China (RM35.8 billion) and the US (RM11.3 billion), reaffirming Malaysia’s position in regional supply-chain diversification efforts.
The services sector continued to anchor the economy, drawing RM187.9 billion in approved investments – nearly two-thirds of the total – across 3,969 projects.
The sector is expected to generate 80,066 jobs. It booked particularly strong inflows into information and communications (RM99.8 billion), real estate (RM56.6 billion) and utilities (RM9.7 billion).
The Ministry of Investment, Trade and Industry cited rising interest in data centres, digital infrastructure and high-value corporate services as evidence of Malaysia’s growing role as a regional headquarters hub.
During 9M 2025, manufacturing approvals reached RM93.8 billion, accounting for nearly 33 per cent of total investments across 885 projects. Foreign investors accounted for RM73.1 billion, or 77.9 per cent of the total.
The sector is expected to create 72,672 jobs, with higher-skilled roles rising as the managerial, technical and supervisory index climbed to 45 per cent.
The primary sector, mainly mining, recorded RM3.5 billion in approvals across 20 projects, split almost evenly between domestic and foreign sources.
Between 2021 and September 2025, the majority of approved manufacturing projects had advanced to implementation, with 85 per cent or 3,724 projects already moving through stages from factory construction up to full-scale production.
The remaining 654 approved projects are either in the planning phase or awaiting a change in commercial strategy by investors.
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