The Middle East war is driving capital toward stable, neutral markets such as Malaysia. “Despite risks from higher oil prices and inflation, investor sentiment remains resilient, with Malaysia increasingly viewed as a defensive haven,” according to Area Management Sdn Bhd, an industrial property developer based in Malaysia, as quoted in the latest Asia Pacific Real Assets Association (APREA) report.
Data centre-linked properties are seen as particularly resilient, driven by rising demand for cloud computing and AI workloads, as well as the limited supply of prime land in key hubs such as Johor and the Klang Valley. “Industrial assets, including data centres and modern warehouses, are the clear winners from digitalisation and supply chain realignment,” said Stewart LaBrooy, executive chairman of Area Management.
JLL has ranked Malaysia as among the world’s fastest-growing data centre markets.
Chris Marriott, CEO of Savills, Southeast Asia, agrees. Marriott is of the view that data centers as well as logistics and mid-market urban residential will be the most resilient opportunities across the region over the next three to five years.
Malaysia and Indonesia are emerging as the region’s next data centre hubs as hyperscalers exhaust available land and power capacity in Singapore, he added.
Vietnam and Indonesia continue to benefit from supply chain diversification and geopolitical neutrality, while the Philippines and Thailand face greater near-term exposure as net energy importers, the Savills SEA head said.
“Demand for industrial and logistics space is outpacing supply in Vietnam and Indonesia, where multinationals have accelerated factory relocations amid ongoing trade realignment.”
“Rather than focus on the disruption from the Middle East conflict, it’s important to understand the long-term structural shifts being driven by an increasingly multipolar and fragmented global environment,” he said, as quoted by APREA.
In the Philippines, data centers are gaining ground as hyperscalers increasingly partner with local developers, Rick Santos, chairman and CEO of Santos Knight Frank, told APREA.
“The current macro environment is effectively acting as a filter — separating sectors with structural demand from those still dependent on cyclical recovery. What we’re seeing is a pause, not a retreat,” Santos added.
The APREA report concluded that investors in Southeast Asia are rotating toward sectors tied to digital infrastructure, manufacturing expansion, and domestic consumption.