Malaysian firms tap Australia's multibillion-ringgit investment boom

KUALA LUMPUR: Australia is becoming an increasingly important growth engine for Malaysian companies, as they tap billions of ringgit worth of opportunities spanning infrastructure, renewable energy (RE), mining and property.

The scale of that exposure is already significant for some Bursa Malaysia-listed firms such as Gamuda Bhd, which boasts more than one-third of its RM61.6 billion outstanding order book tied to Australian construction jobs.

CIMB Securities Sdn Bhd analysts Kenny Mak Hoy Ken and Wei Yi Tan said Australia's appeal as an investment destination is backed by favourable migration trends, opportunities for scalable operations and a sound business environment.

"The core investment focus of Malaysian corporates and government-backed entities in Australia is centred on the four sectors which continue to provide long-term value," they said in a note.

Infrastructure is among the areas where the scale of opportunity is particularly pronounced, with major spending programmes across several Australian states opening up potential work for Malaysian firms.

For Sime Darby Bhd's industrial arm, the opportunities include RM21 billion of spending ahead of the 2032 Brisbane Olympics, Sydney Metro's RM60 billion investment plan over the next four years and Western Australia's aim to attract RM160 billion in private investments over four years.

Gamuda, meanwhile, has established itself as one of Australia's leading Tier-1 contractors since entering the market in 2015, the analysts said.

Its Australian operations now employ about 2,500 people and span major rail, road and RE projects.

The company is currently undertaking the RM7.3 billion Sydney Metro West Stations Package West after winding down work on the RM6.5 billion Western Tunnelling Package.

It recently added the RM2.5 billion Parramatta Integrated Station Development, its third major Sydney Metro contract, in which Gamuda has an effective 80 per cent participation.

The latest win means Gamuda has secured six of the nine station packages along the Sydney Metro West line.

CIMB Securities expects the Parramatta station works to potentially generate pre-tax margins of up to eight per cent, compared with the typical five to six per cent for its conventional Australian infrastructure jobs.

The group is also part of a consortium shortlisted for a construction package under the Sydney-Newcastle high-speed rail project, whose overall cost is projected at up to AU$90 billion.

Australia's energy transition is opening another avenue for Malaysian capital.

The country is targeting RE to account for 82 per cent of electricity generation by 2030, requiring further private investment in generation, storage and transmission infrastructure.

Investment in utility-scale solar alone reached a record AU$3 billion in the first half of 2026, compared with AU$876 million in the second half of last year.

CIMB Securities said discussions with Malaysian infrastructure and utility players operating there pointed to an upbeat longer-term view of Australia's clean-energy transition.

"Leading the Malaysian charge in Australia's booming RE market are Gamuda and Petroliam Nasional Bhd (Petronas)-backed Gentari Australia," it said.

Gamuda has already secured projects across solar, wind, hydro, battery storage and electricity transmission, while increasingly moving beyond construction into ownership of RE assets.

The company has raised its target for RE assets under development, construction and operation to five gigawatts (GW) by 2031.

This is after achieving its initial target of building a 1GW to 2GW portfolio by 2029, within two years of entering Australia's energy market.

Australian projects are expected to make up a substantial portion of the enlarged portfolio.

Petronas' Gentari is also building its Australian footprint.

Its RE portfolio currently comprises 422 megawatts (MW) of installed capacity, with another 571MW under management. Its flagship Maryvale project in New South Wales pairs a 243MW-peak solar farm with a 172MW battery energy storage system.

Property is emerging as another area of Malaysian interest, although developers are becoming more selective as Australia's broader residential market softens.

CIMB Securities said Malaysian developers were increasingly targeting purpose-built student accommodation, co-living and rental housing, particularly in Melbourne and Sydney.

"The Malaysian developers are focusing on the more resilient living sub-sectors such as purpose-built student accommodation as well as co-living accommodation schemes that offer flexible, community-focused living with shared amenities," it said.

The opportunity is driven by a shortage of student accommodation. Cushman & Wakefield estimates Melbourne alone could face a shortfall of as many as 200,000 student housing beds, based on 2023 enrolment levels.

Malaysian developers with projects or expansion plans in Australia include SP Setia Bhd, Sime Darby Property Bhd, UEM Sunrise Bhd, Matrix Concepts Holdings Bhd, MRCB and Gamuda.

For CIMB Securities, Gamuda remains its preferred Malaysian stock for exposure to Australia's infrastructure and RE pipeline.

The research firm said the size of Gamuda's Australian order book underscored the country's growing importance to the group.

It said the RM61.6 billion record order book, of which Australian construction jobs account for 35 per cent, highlighted "Australia's strategic importance in sustaining Gamuda's order book replenishment trajectory.