APAC Data Centre Update: H2 2024

JOHOR ASIA PACIFIC PRIMARY MARKET

KULAI / SEDENAK

KEY INDICATORS*

401MW In Operation

10 / 12 Operators / Data Centres

226MW / 822MW UC / Planned

1% Colo Vacancy

Colo Hyperscale Cloud Telco

NUSAJAYA/ ISKANDAR PUTERI

MARKET OVERVIEW Johor has sustained its rapid growth, adding over 300MW of new capacity in the past 12 months—an impressive 330% year-on-year (YOY) increase. The market has solidified its position as a preferred destination for hyperscale deployments and built-to-suit facilities, driving the vacancy rate down to just 1%—one of the lowest in the Asia Pacific region. Currently, the market has a development pipeline of approximately 1,046MW, while land holdings owned by operators have the potential to add another 2GW of capacity in the future. Johor has long benefitted from its proximity to Singapore, capturing almost all its spillover demand. Now, with the establishment of the Johor-Singapore Special Economic Zone (SEZ), its prominence as a strategic data centre hub has been further elevated. The Pulai region in southern Johor and the Sedenak Tech Park have emerged as the most sought after locations for data centre operators, accounting for 44% and 53% of the current operational capacity, respectively. However, with 53% of the current development pipeline concentrated in Pulai, it is on track to become Malaysia’s largest data centre cluster, exceeding 750MW in capacity when developed. Johor is also gaining recognition as a prime location for AI deployments, thanks to its robust infrastructure, including ample power, water, and land availability for large-scale data centre builds and long-term expansion. Several leading American and Chinese hyperscalers are already developing their largest campuses in Johor, designed to support cloud computing and AI workloads. With its strategic advantages, accelerating growth, and increasing global interest, Johor is poised to become a major data centre powerhouse in the region.

ECOSYSTEM DEVELOPMENTS •

Malaysia introduced the Corporate Renewable Energy Supply Scheme (CRESS) to enable corporate consumers to procure renewable energy directly from power producers via an open grid access model. Regulated by the Energy Commission, it introduces a third-party access framework, requiring participants to pay a system access charge. • Telekom Malaysia and SingTel's Nxer have entered a joint venture to develop data centres in Malaysia, starting with a 64MW facility in Johor, which has the potential to offer up to 200MW of capacity. • The Johor data centre development coordination committee disclosed that it has rejected almost 30% of the new data centre applications it received. Reportedly, the committee predominantly rejected the applications where the operators did not demonstrate sustainable practices to reduce water and power usage at their facilities. The committee also suggested that data centre applications need to include strategic plans for sustainability, amongst others. • The Malaysian government introduced the Data Centre Planning Guidelines (GPP) that aims to standardize and streamline the application and planning approval process for data centre development. • Oracle announced its plan to invest $6.5B in developing AI and cloud computing infrastructure in Malaysia, offering over 150 of its infrastructure and cloud services to clients in Malaysia. While the location for the cloud region has not yet been disclosed, it is anticipated to be located between the two major data centre hubs in Malaysia, i.e., Johor and Kuala Lumpur. • Yondr announced that it has secured over US$900M in debt for its 300MW data centre campus in Sedenak Tech Park, Johor. The funds are expected to be used to develop the first 98MW capacity in the campus.

CUSHMAN & WAKEFIELD | ASIA PACIFIC DATA CENTRE MARKET OVERVIEW