KUALA LUMPUR, 2 April 2026 – Sime Darby Property Bhd’s latest contract award to IJM Corp Bhd is being viewed as a timely catalyst for its data centre ambitions, offering reassurance to investors that progress at its flagship Elmina Business Park development remains on track despite heightened market volatility.
The award valued at approximately RM658 million covers the construction of a hyperscale data centre and comes at a critical juncture as global uncertainty, driven by geopolitical tensions, continues to weigh on investor sentiment.
Strategic Timing Amid Volatile Markets
Analysts note that the timing of the award is particularly significant, as equity markets remain unsettled by the Middle East conflict and its ripple effects on global capital flows.
The contract signals that Sime Darby Property is pressing ahead with execution, reinforcing confidence that its data centre strategy, a key growth pillar, is not being derailed by external shocks.
For investors, this serves as a critical reassurance that large-scale industrial developments in Malaysia continue to progress despite macro headwinds.
Elmina Data Centre: A Multi-Billion Ringgit Opportunity
The Elmina Business Park project is emerging as one of Malaysia’s most significant data centre clusters.
Key highlights include:
- Two hyperscale data centres under development
- Long-term lease value of RM2 billion (Data Centre 1) and RM5.6 billion (Data Centre 2) over an initial 20-year period
- Expected income contribution beginning from late 2026
The scale of these developments underscores the growing importance of digital infrastructure as a new earnings driver for property developers.
Earnings Visibility Improves, But Funding Strategy Key
The project is expected to start contributing to Sime Darby Property’s earnings from financial year 2027, with early annual net income estimated at RM40 million to RM50 million after financing costs.
However, analysts also point out that the company may need to fine-tune its investment strategy — particularly for the larger Data Centre 2, to balance capital commitments with other industrial property developments.
This highlights a broader challenge for developers entering the data centre space:
balancing high upfront capital expenditure with long-term recurring returns.
IJM Strengthens Position in Data Centre Construction
For IJM Corp, the contract further solidifies its growing footprint in Malaysia’s data centre construction segment.
With this latest award:
- IJM’s cumulative contracts in the Elmina development exceed RM1.9 billion
- Data centre projects now form a significant portion of its order book
- Construction is scheduled to begin in 2Q2026 and complete by 3Q2027
The project also reinforces IJM’s positioning as a preferred contractor for large-scale, high-value infrastructure developments.
Data Centres: The New Growth Engine for Property Developers
The development reflects a broader structural shift in Malaysia’s property sector, where developers are increasingly pivoting toward industrial and digital infrastructure assets.
Data centres, in particular, offer:
- Stable, long-term recurring income streams
- Strong demand driven by cloud computing, AI, and digitalisation
- Higher resilience compared to traditional property segments
This transition is transforming the sector from cyclical property exposure to more defensive, yield-driven investment profiles.
Asian Investor Perspective: Digital Infrastructure in Focus
For Asian investors, the project highlights a key emerging theme:
data centres are becoming a core asset class in the region’s investment landscape.
Key implications include:
- Rising demand for hyperscale facilities across Southeast Asia
- Opportunities in construction, REITs, and infrastructure plays
- Shift toward income-generating assets with long-term leases
Malaysia, with its strategic location and improving digital ecosystem, is positioning itself as a competitive data centre hub within the region.
Outlook: Execution Key to Unlocking Valuation Upside
Looking ahead, the successful execution of the Elmina data centre project could serve as a major re-rating catalyst for Sime Darby Property.
Analysts suggest that, if market conditions stabilise, the company may proceed with plans to list its industrial investment assets via a REIT, unlocking further value for shareholders.
For now, the contract award sends a clear signal:
Malaysia’s data centre ambitions remain firmly on track, even amid global uncertainty.
