,Malaysia

Investors, operators scramble to enter Malaysia’s data centre market

The country’s current data centre capacity ranges from 120MW to 150MW.

The pandemic has seen the demand for data centres surge as most countries needed connectivity like never before. In Malaysia, JLL says bandwidth usage peaked at 1.2 Tbps (TeraBits Per Second) in August 2021, creating the need for data centres and cloud-based services throughout the country.

Here’s more from JLL:

As such, JLL Malaysia has received many enquiries for data centres and facilitated a few land transactions as investors and operators scramble to enter the market. Particularly, hyperscalers like Microsoft, Amazon and Google have obtained conditional approval to build and manage large-scale data centres and cloud services throughout the country, uplifting Malaysia’s prominence as a data hub within the region. Other recent greenfield development investments and company acquisitions include PCCW Solutions, GDS and Bridge Data Centre transactions.

Malaysia’s current data centre capacity is between 120MW and 150MW, concentrated in Greater Kuala Lumpur (Greater KL) and Johor, with a few in Penang. Cyberjaya, located in the south of Greater KL, is the most preferred location due to its well-planned infrastructure, relatively low land prices and proximity to the city centre. VADS, NTT, Bridge, amongst others, currently have more than 30 facilities in this area, and they are expanding aggressively. 

On the other hand, Johor has started to gain more attention, mainly due to its proximity to Singapore. With this strong inflow of global tech players and expansion plan of existing players, the Malaysian Communications and Multimedia Commission (MCMC) is expecting the addition of 150MW of data centre capacity in the next few years.

Malaysia is currently connected to 23 submarine cable networks and 15 landing stations, providing excellent connectivity with the rest of Asia and the world.

The Government of Malaysia is promoting growth in the data centre sector and is committed to creating a viable ecosystem. Incentives include up to 100% tax exemption for eligible data centres and cloud businesses investments. The MCMC plans to increase the number of Internet Exchange Point (IXP) providers from the existing 12 to 66 by 2025. On the other hand, the Malaysia Digital Economy Blueprint (MyDIGITAL) has aimed to improve Malaysia’s infrastructure, certainly drawing more players to this sector.

An abundance of developable land, competitive electricity rates, and a pool of dynamic, literate and skilled workers have elevated Malaysia’s competitiveness in operational costs and other resources.

Malaysia has committed to reducing its carbon footprint by generating 31% renewable energy through its power-generation plan by 2025. This goal aligns with the targets set for global data centre players. The World Bank has rated Malaysia 12th in the world for ease of doing business, giving Malaysia a competitive advantage in attracting domestic and international investors seeking data centre and cloud business opportunities.

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