Johor benefitting from a data centre boom

/ EdgeProp Singapore |

November 24, 2023 10:30 AM SGT

A Google Cloud data centre in Hanau, Germany. Last year, Google announced plans to bring three new Google Cloud regions to Malaysia, Thailand and New Zealand (Photo: Bloomberg)

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The state of Johor in Malaysia is expected to attract RM17 billion ($4.9 billion) in new data centre investments in 2024, building on the RM51.1 billion in data centre investments in 2022, according to the 1H2023 report by Malaysian property agency Zerin Properties.

Previn Singhe, founder and group CEO of Zerin Properties, attributes the influx of investments in Johor to Singapore’s implementation of more stringent criteria for data centres driven by sustainability considerations. In January 2022, the Singapore government lifted a moratorium it had imposed in 2019 in response to the significant energy consumption associated with data centres.

The latest to announce its opening of a data centre in Johor is Singapore-based ST Telemedia Global Data Centres (STT GDC). The new STT Johor data centre campus is its second in Malaysia.

The data centre campus will be built on 22 acres (8.9ha) of land and will have a development of 120 megawatts of IT power supplied from diverse substations close to the new data centre campus. Located in the Nusa Cemerlang Industrial Park (NCIP) in Iskandar Puteri, Johor, it will be just 15km from Singapore. The data centre will also have access to critical telecommunication links.

The data centre site is an amalgamation of seven land parcels purchased from developer Panoramic Industrial Development (PID), a wholly-owned subsidiary of Bursa Malaysia-listed developer Crescendo Corp. The seven sites total 975,000 sq ft and were acquired for RM117 million.

“Our expansion into Johor is a natural step forward as we deliver vital digital infrastructure services that not only meet the surging and ever-evolving demands of our customers for complex design and scalability, but also anticipate future needs, particularly high-performance computing workloads for AI and visual computing,” says Lionel Yeo, STT GDC CEO of Southeast Asia.

On Nov 2, STT GDC formed a joint venture with Basis Bay, a provider of sustainable cloud and green data centres, for the development, construction and operation of data centre projects in the capital city of Kuala Lumpur and Cyberjaya in Malaysia.

On Nov 17, Crescendo Corp’s PID inked a deal to sell Microsoft Payments (Malaysia) a 2.63 million sq ft vacant freehold land in Pulai, Johor, for RM315.17 million cash.

In April, Microsoft announced that it will establish a data centre region under the Bersama Malaysia initiative. The data centre region is said to be a symbol of Microsoft’s US$1 billion ($1.3 billion) commitment to Malaysia over the next five years. It will include building and setting up the data centre region in Greater Kuala Lumpur.

In March, Amazon announced that its cloud computing division, Amazon Web Services (AWS), plans to invest US$6 billion in Malaysia over the next 14 years. It plans to strengthen its cloud services infrastructure in Malaysia, marking the company’s latest move to build AWS infrastructure regions across Southeast Asia.

Last year, Google announced plans to bring three new Google Cloud regions to Malaysia, Thailand and New Zealand, on top of six other regions announced previously — Berlin, Damman, Doha, Mexico, Tel Aviv and Turin.

In May, Asia Pacific data centre firm Princeton Digital Group acquired 31 acres of land from JLand Group to build a 150MW data centre campus within the 700-acre Sedenak Tech Park in Johor. The development, JH1, will be one of Southeast Asia’s largest data centre campuses. The first phase, with 60MW capacity and an RM2 billion investment, is set to begin operations by 2Q2024.

A month earlier in April, Malaysian infrastructure and construction company MN Holdings partnered with China’s Shanghai DC-Science to develop a US$600 million data centre on a 20-acre site in Sedenak Tech Park. Phase 1 began this year, with operations to start in 1H2024. It will be DC-Science’s first data centre in Malaysia.

More investments from Chinese companies have headed to Johor following the visit to China by Malaysia’s Prime Minister Anwar Ibrahim and Minister for International Trade and Industry Tengku Zafrul Aziz in April.

For instance, China’s largest petrochemical company, Rongsheng Petrochemical Co, committed to investing RM80 billion in Johor, making it one of the most significant investments and among Malaysia’s largest projects if realised.

In June, China’s EcoCeres announced a RM1 billion investment in a new biofuel production facility in Pasir Gudang, Johor. The facility will serve as a major production hub for hydro-treated vegetable oils, sustainable aviation fuel and bio-naphtha, with an annual capacity targeted at 350,000 tonnes.

Having attracted a record RM70.6 billion in investments last year, Johor is set to remain a key contributor to Malaysia’s investments, says Zerin Properties’ Singhe.

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Johor benefitting from a data centre boom

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