ISKANDAR PUTERI (Sept 27): The data centre market in Malaysia is growing rapidly and will continue to expand further as the current supply of data centres in the country is still insufficient to cater for the increasing demand, according to CBRE Group Inc.

Dedi Iskandar, head of CBRE data centre solutions, advisory and transaction for Asia Pacific, noted that Malaysia, being in the tier-two market for data centres, provides a very attractive landscape and offers the biggest opportunity for growth. He said the country offers vast land areas which are affordable, plenty of power and water resources, as well as greater connectivity for data centre operation.

"The Malaysian market has one of the highest projected growth for data centre capacity in the Asia Pacific region against its current pipeline, estimated to grow at 383% over the next few years. This means that there is big confidence among global data centre operators to bring more capacities into the country.

"The current supply for data centres in Malaysia is not enough and that is why a lot of companies are building new data centre capacity in the country," he told Bernama on the sidelines of Invest Malaysia 2024 @ Iskandar Puteri, here on Thursday.

According to Dedi, Malaysia has also seen accelerated cloud adoption, representing a compound annual growth rate (CAGR) of 13%, a mere one per cent lower than the global CAGR of 14% this year. Surprisingly, the awareness of artificial intelligence (AI) in Malaysia is also one of the highest in the Asia Pacific region, he said.

"Malaysia has been an early mover to identify and move to attract global AI companies to invest in the country," he said, adding that Malaysia has one of the most sophisticated connectivity to connect the region into broader areas of the world.

Commenting on the capacity in Johor, Dedi noted that the state's data centre capacity currently stands at 154 megawatts and the upcoming and applied capacity is expected to grow to around two gigawatts.

"This is a very clear indication that the capacity is not going to be just for the domestic market, but it is going to be the global hub for Asia Pacific," he added.

According to Dedi, amid bustling activities for data centres in Johor and the capital Kuala Lumpur, the Sarawak region has the potential to become the next hotspot area for data centre players.

"We see great potential for Sarawak in particular because the majority of their power supplies are coming from the hydro-powered grid and these are very compelling options for investors coming into the region.

"However the main challenge is that there is not enough connectivity to provide seamless services to data centres despite good support from the government," he said.

Dedi noted that Johor and Kuala Lumpur have been very successful regions for data centre facilities based on multiple factors — good connectivity, business-friendly authorities, and continuous support from the government. "To replicate that success in other parts of Malaysia requires more than just the availability of land areas, you need to make sure that proper connectivity goes into that particular location," he said.

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