According to Knight Frank, Malaysia is the premier destination for data centre investment in Southeast Asia

According to Knight Frank, Malaysia is the premier destination for data centre investment in Southeast Asia

Malaysia is the most attractive destination among Southeast Asian emerging markets for data centre investment, said independent real estate consultancy Knight Frank Malaysia.

The company today launched its white paper on data centres in Malaysia in partnership with DC Byte, highlighting the country’s attractiveness for data centre investment in Kuala Lumpur and Johor.

Knight Frank Asia Pacific Data Centre lead associate director Fred Fitzalan Howard said Malaysia is leading in the Knight Frank SEA-5 Data Centre Opportunity Index, which examines key markets within Malaysia, Indonesia, Vietnam, the Philippines and Thailand to understand how each country ranks against its peers in data centres.

“The white paper will shed some light about what is happening across two key markets for data centre investment in Malaysia. The first one, Kuala Lumpur, is seeing a huge cloud appetite with Western hyperscale providers announcing the launch of their cloud regions in the past 12 months.

“Secondly, we wanted to touch upon the growth opportunity in Johor, not only through spillovers from Singapore, but also as the upcoming regional hub for data centres for Western and Chinese hyperscale service providers,” he said after the launch here today.

Howard noted that Malaysia managed to take a leading position in the SEA-5 market due to its strong 8.7% gross domestic product and the newly announced cloud regions of Amazon Web Services and Google in the country.

He said the country’s relative growth against other tier-2 markets in Asia is proof that Malaysia, alongside Indonesia, is surging ahead as the largest provider of space and supply for data centre investment.

“In contrast, other rival nations are grappling with land ownership laws and telecommunications deregulation, hindering their growth potential.

“Over the last decade, a surge in cloud interest, government-backed initiatives and the Singapore data centre moratorium has contributed to Malaysia becoming one of the most dynamic data centre markets in the Asia Pacific region,” he added.

According to the white paper, data centres in Malaysia registered 113MW of take-up in 2022 – a four-fold increase over Thailand, the next highest market, which saw a respectable 25MW of take-up.

“Much of this take-up accounts for the growth in Johor, although Kuala Lumpur, which has also reported double digit take-up figures for the past three years, has also contributed to this,” it said.