JLL Malaysia anticipates more data centre developments across Malaysia due to rising demand - MIDA | Malaysian Investment Development Authority
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JLL Malaysia anticipates more data centre developments across Malaysia due to rising demand

JLL Malaysia anticipates more data centre developments across Malaysia due to rising demand

06 Jun 2024

While Greater Kuala Lumpur and Johor remain the two locations with the highest growth in the number of data centres in Malaysia, other locations will also start seeing more data centre developments as demand continues to increase, according to JLL Malaysia.

In his presentation at JLL Malaysia’s Data Centres Perspectives event held on Thursday, JLL Malaysia data centre team member Kent Seet said that besides Johor and Greater Kuala Lumpur, Negeri Sembilan and Kedah could see a rise in data centre development activities.

“These two states can provide the necessary resources and infrastructure. And, JLL believes that if the process of upgrading existing or building new data centres in the mature locations could not be done speedily, Negeri Sembilan and Kedah might benefit from the overspill of demand from KL and Johor,” he said, adding that that aside from the established technology parks in Cyberjaya and Bukit Jalil, other areas in the Klang Valley could be potential areas for data centres as well.

Seet also highlighted that Johor will continue to grow as a data centre hub, thanks to the instrumental role of the state authorities in reducing red tape and streamlining processes in data centre developments.

“The data centre growth will be driven by established data centre-centric parks such as the Sedenak Tech Park and also pockets of new industrial parks in other locations such as Kulai, Skudai, Plentong and Tanjung Kupang, all these being potential locations,” he noted.

Meanwhile, Malaysia Digital Economy Corporation (MDEC) head (digital infrastructure and digital enablers) Tan Tze Ming shared in his presentation that, while the hotspots for data centres are concentrated mainly on the west side of Johor, there is potential for developments also on the east side, such as Pasir Gudang.

“There is plenty of land, water and power in Pasir Gudang. The only issue is that there is not yet a cable connection to the east side of Singapore. At the moment, MDEC is looking to secure potential developers, but without a bridge, it is not easy to get the cables across [to eastern Singapore]. We are also working on getting the open submarine cable landing stations ready, one on the western coast and another on the eastern coast of Johor, which will allow any subsea cables to enter Malaysia and enhance connectivity for Johor-based data centres,” he said.

Tan revealed that MDEC is also proposing a new submarine connectivity route for US-linked cables off the coast of Sabah and Sarawak, bypassing the disputed nine-dash line in the South China Sea, to ensure that East Malaysia is also benefitting from the data centre boom.

According to JLL Malaysia’s report entitled Data Centres: The Malaysian Perspective, which was launched on Thursday at the same event, it stated that Malaysia’s data centre market has experienced significant growth, driven by factors such as the rise of cloud computing and artificial intelligence (AI), growth of digital services and increasing data-intensive activities in various industries.

According to the report, as of 2022, Malaysia has a social media penetration rate of about 91.7%, outpacing Singapore’s at 89.5%, suggesting further growth potential for the data centre segment in the country.

As for total power capacity supply, the current figures stood at about 262 megawatts (MW), and the figure could grow to approximately 860MW by end-2025. “Taking into account all proposed data centre projects, the country is looking at a potential wattage of approximately 2,270MW beyond 2027,” the report said.

Source: The Edge Malaysia