Malaysia ranks as top destination for data centre investment: Knight Frank

The country beats its SEA-5 market peers.

Malaysia has emerged as the most attractive destination for data centre investment, according to The Knight Frank SEA-5 Data Centre Opportunity Index report. The robust growth experienced in the region is attributed to the rising demand for cloud computing, big data, and e-commerce in Southeast Asia.

According to the report, the last few years saw a rise in demand for building data centre infrastructures in tier 2 locations in the Asia Pacific (APAC) region. These locations have become highly desirable for data centre development as Cloud service providers look to open dedicated Cloud regions in these markets.

With 113 MW of take-up in 2022, Malaysia's impressive growth ranked top amongst its peers in SEA region, and reported a four-fold increase over the next highest market of Thailand. 

The development of Malaysia's data centre industry has primarily taken place in two main regions: Greater Kuala Lumpur (comprising of Central Kuala Lumpur and Cyberjaya) and Johor. Following the trend of global data centre markets, the initial wave of infrastructures was built within the CBD of Kuala Lumpur and was relatively small in nature. However, the last decade gained enough momentum in the industry, resulting in higher interest in cloud technology, more government-backed initiatives, 

Additionally, the emergence of Cloud Service Providers opening dedicated Cloud regions to serve the Malaysian population has prompted an aggressive expansion by data centre operators. 

According to the report, the market share of built or planned capacity remains evenly distributed across the Malaysian landscape. However, key investments in Cyberjaya are expected to position the region to become the largest data centre in the greater KL region.

Affordable land prices, reliable power infrastructure, and proximity to the capital city originally drew data centre operators to this location, along with the government's plans to attract tech hubs to this city adjacent to the new administrative capital of Putrajaya.