Johor’s data centres getting a boost from the Singapore factor; water, power remain bottlenecks

KULAI: Johor’s Kulai district, some 70 kilometres north of Singapore, is known for its rubber plantations and oil palm estates. 

These days, however, you’ll also find hundreds of acres of construction sites with cranes and work crews. 

Within three years, the sites will become industrial parks hosting multiple data centres – buildings that house large groups of high-speed computers, servers and routers that store, process as well as distribute vast amounts of data. 

The world’s growing reliance on cloud-based technology has fuelled the growth of data centres, and Johor has become one of the hotspots in Malaysia.

In particular, southern Johor, with its proximity to the Singapore's financial hub and comparative advantages like abundant land and cheaper power, could be well-positioned to be a key regional player, experts say.

Major data centre players like Nvidia, AirTrunk, GDS International, YTL Power as well as Princeton Digital Group have set up operations there, and tech giant Microsoft has reportedly purchased land in Kulai to open a data centre. 

According to resource site Baxtel, Johor has 13 data centre facilities across more than 1.65 million square feet of land mass. The state is also ranked as the largest data centre market in Malaysia and ninth-largest in Asia Pacific. Baxtel added that four other data centres are being constructed in Johor. 

Johor is expected to pull RM17 billion (US$3.6 billion) in new data centre investments this year, building on RM51.1 billion in investments in 2022, according to Malaysian property agency Zerin Properties.

The Malaysia government has also supported Johor’s data centre ecosystem by building industrial parks with suitable infrastructure. Two of the biggest are the 745-acre