APPD Market Report Article

Kuala Lumpur

August 25, 2022

Christopher Street, Head of Data Centres, Asia Pacific

N/A

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MRC Stable

Cloud players drive colocation demand

  • Demand is largely driven by cloud service providers as they intend to increase their footprint due to its strategic location and improved digital infrastructure.
  • Trend of steady demand witnessed from BFSI, startup enterprises and due to adoption of digital initiatives by the government.

Robust supply pipeline is expected to meet rising demand

  • Malaysia currently has approximately 178 MW, and expects the upcoming supply (currently either in the planning stage or under construction) to be more than double of the current capacity, to the tune of 444 MW upon completion.
  • Australian Edge data centre firm has begun work on its edge facility, as Kuala Lumpur has 5G coverage and would require more edge DCs. The government has planned to allow four multinational companies to develop cloud-based services facilities and data centres.

Government digital initiatives to attract investments

  • Malaysian telecom player, Time dotcom is selling its AIMS Data Centre portfolio and is reported to have received bids from DigitalBridge, Digital Edge, STT GDC and Equinix Inc. The deal is expected to fetch a USD 500-600 million valuation.
  • Yondr Group has plans to enter the Malaysian market with a 200 MW hyperscale campus in Johor. The campus is planned on 72.8 acres of land acquired from TPM Technopark Sdn Bhd (a subsidiary of Johor Corporation), located in Sedenak Tech Park. The first phase is scheduled for completion in 2024.

Outlook: Malaysia emerges as a complementary DC destination

  • Growing interest is expected from hyperscalers in setting up DCs within the Greater Kuala Lumpur area (Cyberjaya, Bukit Jalil and other fringe locations).
  • There is strong interest from the DC community in Johor Bahru, especially the infra-ready industrial sites (KIDEX, Iskandar Region).

Note: Kuala Lumpur Data Centres refers to Kuala Lumpur's overall data centre market.

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