September 2025 Market Outlook
U.S. Market Rally and Semiconductor Relief – August 2025
U.S. equities rallied in August despite volatility—S&P 500 rose 1.9%, Nasdaq surged 4.3%—driven by strong earnings (75% beat forecasts) and semiconductor policy relief. Chipmakers received tariff exemptions if they maintain U.S. production, benefiting Malaysian firms by avoiding the 100% finished-goods tariff.
Treasury yields and the U.S. dollar weakened, with the 10-year yield falling from 4.37% to 4.23%. Fed Chair Powell’s dovish tone led markets to fully price in a 25-basis point rate cut at the September FOMC. This easing trend is expected to lower global financing costs and boost asset valuations, including Malaysia’s property sector.
Malaysia’s Economic Performance: Steady Growth, Low Inflation
Malaysia’s GDP grew 4.4% year-on-year in Q2 2025, matching Q1’s pace. Growth was fuelled by private and public investments (+18.7%), reflecting progress on key projects. Inflation remained low at 1.3% in August, slightly above July’s 1.2%, giving policymakers room to align with future Fed cuts while supporting domestic demand.
REIT Sector Recovery
Malaysia’s Real Estate Investment Trusts (REITs) are rebounding, led by retail-focused assets:
- Pavilion REIT: Revenue up 6% YoY, driven by higher rental income and tenant turnover rent
- Sunway REIT: Revenue up 20.4% YoY, boosted by Sunway Pyramid Mall expansion and AEON Seri Manjung acquisition
- Office & Specialty REITs: Stable long-term leases, high occupancy, gradual recovery in retail and hotel segments
- Axis REIT: Full occupancy in logistics and industrial assets, actively acquiring new facilities
The REIT rebound reflects domestic consumption recovery, strong industrial demand, hotel sector recovery, and full occupancy in premium office spaces.
Construction Sector Momentum
The KL Construction Index rose 7.4% in August 2025, reflecting strong momentum across Malaysia’s property and infrastructure sectors:
- Gamuda Berhad: Revenue up 11% YoY, supported by robust domestic construction activity and a record RM38B order book
- IJM Corporation: Revenue up 23.4% YoY, driven by wins in Pulai and Johor data centre projects and the NPE Extension; RM12.9B order book
- Sunway Construction: Revenue up 127% YoY, fuelled by multiple data centre projects, doubling its order book to RM6.72B
In H1 2025, developers focusing on affordable housing and industrial assets posted strong growth. Meanwhile, luxury and overseas segments showed signs of stabilization, with renewed interest from foreign investors and high-net-worth buyers. Strategic launches and targeted incentives are helping these segments regain traction, with expectations of a more balanced performance in H2 2025.
Summary
Global monetary easing, resilient domestic growth, and low inflation create a favourable backdrop for Malaysia’s property market. Lower financing costs and rising investor confidence are set to lift valuations across residential, commercial, retail, and industrial segments—supporting consumer sentiment and housing demand.
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