Negri Sembilan's growth story unfolds beneath political storm

KUALA LUMPUR: Negri Sembilan may be making headlines for its political turmoil, but beneath the uncertainty, billions of ringgit in investments are reshaping the state's economic landscape.

The state secured RM10.2 billion worth of construction projects as at Sept 15, surpassing the RM6 billion recorded throughout 2025, as industrial parks and data centres drive development.

RHB Research said Negri Sembilan ranked sixth nationwide in construction project awards, behind Johor, Selangor, Sabah, Sarawak and Kuala Lumpur.

The firm described Negri Sembilan as "Malaysia's next industrial growth frontier", citing its proximity to the Klang Valley, competitive land prices, improving infrastructure and expanding semiconductor ecosystem.

"As the state accelerates efforts to attract high-value manufacturing and technology investments, we believe its growing investment pipeline could pave the way for stronger economic activity, infrastructure development, and private-sector opportunities," it said in a note.

The report comes amid a political crisis that has seen the revocation of all 10 state executive councillors' appointments following a dispute over the position of Yang di-Pertuan Besar Tuanku Muhriz Tuanku Munawir.

While the political situation remains unresolved, RHB Research highlighted the opportunities ahead for property developers, contractors and infrastructure players.

CONSTRUCTION BOOM GATHERS PACE

The value of construction work done in Negri Sembilan reached RM1.6 billion in the second quarter (Q2) of 2026, compared with RM1.2 billion a year earlier.

Non-residential construction more than doubled to RM724 million from RM307 million, a 135.6 per cent year-on-year increase.

Construction work had earlier reached RM1.8 billion in Q1 2026, the highest quarterly value since Q1 2019.

RHB Research attributed the growth partly to industrial parks and data centre developments.

Negri Sembilan attracted RM19.13 billion in approved investments across 295 projects in 2025, placing it among Malaysia's six largest investment destinations, the firm's data showed.

Another RM5.01 billion was approved in the first half of 2026, comprising RM3.36 billion in foreign investments and RM1.65 billion in domestic investments.

Manufacturing contributed 37.4 per cent to the state's gross domestic product (GDP) in 2025, second only to services at 53.3 per cent.

Its industrial base spans electrical and electronics (E&E), chemicals, food manufacturing and metal fabrication.

RHB Research said the state was positioning itself to capture higher-value activities, particularly semiconductors, aerospace, pharmaceuticals and advanced manufacturing.

"The expansion of these activities could also generate broader spillovers into logistics, business services, and other supporting industries," it said.

BEYOND THE KLANG VALLEY

Negri Sembilan's investment appeal is rooted partly in geography.

Immediately south of the Klang Valley, it offers access to Kuala Lumpur (KL), KL International Airport, Port Klang and major road and rail networks, alongside more affordable industrial land and room for expansion.

Only about 12.6 per cent of its land has been developed.

"As land prices in the Klang Valley and Johor escalate, Negri Sembilan becomes a natural choice as industrial land prices in the state are still considered reasonable," RHB Research said.

Industrial plots marketed by some developers in the state are priced at about RM60 to RM75 per square foot.

Central to its expansion is Malaysia Vision Valley (MVV) 2.0, a development corridor spanning about 153,375 hectares (ha) across Seremban and Port Dickson.

The state-led, private-sector development is designed to extend Greater KL's economic reach southwards, with specialised zones for technology, industry, logistics, maritime infrastructure and semiconductors.

About 3,477 hectares of new industrial land have been identified for development.

Planned projects include Negri Sembilan Semiconductor Valley in Senawang, NS Aerospace Valley in Tanah Merah and Techpark@Enstek Phase 3, which will focus on industries such as pharmaceuticals, food technology and high-value manufacturing.

RHB Research said the state's relatively small economic base offered room for expansion, while its established manufacturing sector provided a foundation for new investments.

"The longer term opportunity therefore lies not only in attracting additional investment, but in deepening industrial linkages and moving towards higher-value activities," it said.

The state aims to attract 2,405 investment projects by 2040, compared with 295 in 2025, while increasing GDP from RM57.01 billion to RM109.1 billion over the 15-year period.

DATA CENTRES OPEN NEW FRONTIER

Data centres are emerging as another major source of investment and construction activity.

Of the RM11.8 billion in approved services investments recorded in 2025, RM11.6 billion came from information and communications technology services.

RHB Research said the growing data centre pipeline could diversify the state's economy as demand for cloud computing and artificial intelligence infrastructure expands.

Gamuda Bhd has secured about RM8 billion in data centre-related contracts in Port Dickson, where Pearl Computing Malaysia has earmarked 157.42ha in Bandar Springhill for development.

Pearl Computing is wholly owned by Raiden APAC, which is in turn owned by Google.

RHB Research estimates that the Bandar Springhill site could accommodate between 500 megawatts (MW) and 700MW of data centre capacity.

Gamuda is also developing a water treatment plant with a capacity of 65 million litres per day to serve the development and surrounding residential areas.

Another major project is the Nexus Yang Green Data Centre campus in Senawang, planned across 63.54ha within MVV 2.0.

The development has an announced long-term investment value of RM20 billion upon full completion, with an initial planned information technology load capacity of about 350MW.

"We do not rule out the possibility of other DC developers coming to MVV's Parcel F as the said parcel comprises 340.34ha of land," RHB Research said.

Meanwhile, Eco Business Park 7 in Bukit Pelandok recorded a RM1 billion land transaction involving about 89.84ha for data centre development.

The transaction implied a land price of about RM105 per square foot, a premium of 30 to 40 per cent over prevailing industrial land prices in Negri Sembilan.

DEVELOPERS AND BUILDERS IN FOCUS

RHB Research maintained its "Overweight" calls on the property and construction sectors, identifying several Bursa Malaysia-listed companies with exposure to Negri Sembilan's expansion.

Major developers include Eco World Development Group Bhd, Matrix Concepts Holdings Bhd and IJM Corp Bhd's property arm, IJM Land Bhd.

Eco World is jointly developing the 483.6ha Eco Business Park 7 with SD Guthrie Bhd and state agency NS Corporation.

The industrial park has an estimated gross development value (GDV) of RM3 billion, with RHB Research estimating potential facility construction work of RM900 million to RM1.2 billion.

Matrix Concepts is developing the 963.96ha MVV City with NS Corporation, with an estimated GDV of RM15 billion.

IJM Land has about 336.29ha of landbank in Negri Sembilan, with an estimated GDV of RM7.7 billion.

RHB Research named Eco World its top pick, citing its position alongside Matrix Concepts, SD Guthrie and IJM to capture rising property demand as industrialisation progresses.

Contractors with exposure to the state include Gamuda, Kerjaya Prospek Group Bhd, Inta Bina Group Bhd and Sunway Construction Group Bhd.

Inta Bina has secured building works at Eco Business Park 7, while Kerjaya Prospek has ventured into the state through IJM Land's IKON Residences project in Seremban 2.

RHB Research also highlighted Sunway Bhd's RM2 billion Seremban Sentral project, a transit-oriented development next to the existing Seremban railway station.

It will include a medical centre, shopping mall, office tower, residential properties and other commercial facilities.

The firm estimates potential construction opportunities of RM800 million to RM900 million, with Sunway Construction potentially involved in most phases, particularly the medical centre and residential component.

Healthcare projects, including the planned Bandar Enstek Hospital, Hospital Tuanku Ja'afar 2 and Sunway Medical Centre Seremban Sentral, could generate further work for contractors.

TURNING INVESTMENTS INTO GROWTH

Despite the investment pipeline, RHB Research identified several challenges to Negri Sembilan's longer-term prospects.

Competition from established industrial destinations such as Selangor, Johor and Penang, as well as emerging markets elsewhere in Southeast Asia, could intensify the contest for investment.

Rapid industrialisation could also strain roads, utilities and other infrastructure, while raising environmental concerns.

"Failure to address these infrastructure challenges could hinder the region's attractiveness to investors and impede further growth," it said.

The residential property market presents another challenge. Negri Sembilan's unsold completed residential units rose 63 per cent year-on-year in Q4 2025, compared with increases of 32 per cent nationwide and 22 per cent in Johor.

RHB Research attributed the sharper increase partly to the state's relatively low base and more aggressive development activity.

To facilitate investment, the state has introduced the Negri Sembilan Fast Lane initiative, which aims to cut project approval times from 24 months to 14 months.

The initiative streamlines development processes, from preliminary approvals to construction completion and operational clearance.

With billions of ringgit in projects in the pipeline, the question now is whether Negri Sembilan can maintain the policy continuity and administrative coordination needed to deliver on its economic ambitions as the political crisis unfolds.