Riding the data centre wave
05 Oct 2023
Malaysia is quickly becoming a regional data centre and an appealing investment destination.
This is a result of increased digital infrastructure expenditure such as cable landing stations, underwater cables, 5G and improved fibre connectivity, according to YTL Corp Bhd executive chairman Tan Sri Francis Yeoh.
According to an April research report from real estate consultancy Knight Frank, Malaysia was the top investment destination for data centre investment last year, with 113 megawatts (MW) of take-up (the second-highest was Thailand with 25MW).
This is largely due to government-backed initiatives and land constraints in Singapore, which is a regional data centre hub.
There is also fervent demand from cloud service giants such as Amazon Web Services, which announced a US$6 billion investment in Malaysia by 2037 to strengthen its cloud service infrastructure in the country.
Yeoh said Malaysia is in a very good position to be a leader in both the data centre and the green energy space.
“Data centres are in high demand globally. Malaysia is blessed with an abundance of land and talent to harness this vital digital infrastructure. Besides, it is a great economic multiplier.
“We are looking to build on the data centre boom as a new engine of growth. For us, data centres are a very important business. But data centres have to be fuelled by green energy, and this is something we can do,” Yeoh told Business Times.
To meet the needs of the group’s mobile telco unit, YTL built its first data centre, a 5MW facility in Kuala Lumpur 14 years ago.
In 2021, YTL Data Centres, a newly established arm of the group’s listed YTL Power International, expanded into Singapore, paying S$200 million for a 50 per cent stake in a second 12.5MW site.
The game-changer, however, is the construction of a RM15 billion data centre park in Kulai, Johor that could provide up to 500MW of capacity, co-powered by a solar farm on an adjacent plot.
The massive 664-hectare solar-powered data centre park will see the first phase of 72MW going online in early 2024.
Yeoh believes that entering the market on a large scale at this stage is well-timed and that it has given YTL group the opportunity to anchor the business from the start on renewable energy, which could put it well ahead of the pack as companies pursue net zero carbon emission policies.
“YTL is a physical infrastructure developer, and now we are layering this with the digital infrastructure business. We have been building and owning physical infrastructure businesses like power generation and distribution, green energy, water and sewage treatment, express rail and real estate.
“Now we are adding a layer of revenue with digital infrastructure businesses like 5G data communications, digital bank and data centres,” he said.
This will augur well for YTL’s sustainable revenues into the immediate and distant future.
“We are blessed as our present generation and our next generation of leaders within the YTL group are competent engineers who are very well versed in both the physical and digital infrastructure businesses,” Yeoh added.