Malaysia’s Data Centre Boom Set to Hit 4,000MW by 2030

Malaysia’s Data Centre Capacity to Surpass 4,000MW by 2030, Says JLL

KUALA LUMPUR — Malaysia’s data centre sector is entering a new strategic consolidation phase, as developers integrate substantial new capacity and expand supporting infrastructure, according to JLL Malaysia.

The country’s total installed data centre capacity currently stands at 835 megawatts (MW) and is projected to exceed 2,850MW by 2026 — with long-term forecasts pointing to over 4,000MW beyond 2030, said Sum Chun Kit, JLL Malaysia’s Data Centre Transactions and Capital Market Manager.

“This will turn Malaysia into one of the biggest data centre markets in Asia-Pacific,” said Sum during JLL Malaysia’s 3Q 2025 market briefing held in Kuala Lumpur on Tuesday.

1. From Rapid Expansion to Strategic Integration

Sum described the market as transitioning from rapid expansion to strategic integration, as new hyperscale and enterprise operators align their projects with national grid and sustainability upgrades.

2. Power, Fibre and Water: The New Data Centre Equation

Sum noted that while power availability remains the primary driver for data centre site selection, fibre connectivity, climate resilience, and water access are becoming equally critical.

“Water remains essential for cooling systems. Some operators are now partnering with local utilities to develop on-site treatment and recycling facilities,” he said.

These sustainability-focused strategies — including closed-loop cooling systems and wastewater recovery — reflect global trends as operators aim to reduce environmental footprints while meeting soaring energy demand.

Cyberjaya remains Malaysia’s most mature cluster, benefiting from robust fibre networks and proximity to Kuala Lumpur, while Johor’s Iskandar region is emerging as a new cross-border digital gateway with Singapore.

Meanwhile, Bukit Jalil and Sepang are gaining traction as “edge data centre” zones, serving the Klang Valley’s growing AI and cloud computing workloads.

3. AI-Driven Demand Reshaping Capacity Needs

Sum emphasised that artificial intelligence (AI) and machine learning workloads will become the next major demand catalyst for Malaysia’s data centre sector.

“We’re seeing increasing investment in AI factories and facilities focused on automation. These workloads require far greater computing power — a single AI search can consume up to ten times more energy than a regular one,” he said.

AI-driven demand is already influencing facility design, with developers deploying high-density racks, liquid cooling systems, and AI-optimised power layouts.

Leading players such as AIMS Data Centre, YTL Power International, Vantage Data Centers, and Bridge Data Centres have all announced expansions targeting AI-ready capacity.

4. Competitive and Consolidating Market

Malaysia’s data centre construction market remains highly competitive, with large players like Sunway Construction dominating design-and-build contracts, while smaller contractors are rapidly upskilling to capture niche opportunities.

“The market is maturing. Local firms are now focusing on quality, efficiency, and environmental compliance,” Sum said, adding that JLL leverages its UK-based project management expertise to strengthen local capabilities.

Recent major contracts — including Binastra Corporation’s RM188.5 million Cyberjaya M&E package and IJM’s hyperscale facility in Johor — highlight how domestic firms are increasingly integrated into regional supply chains supporting digital infrastructure.

5. Sustainability Takes Centre Stage

Sum also pointed to strong policy support from the Malaysian government to ensure sustainable expansion.

Initiatives such as the Corporate Green Power Programme (CGPP) and Crest Scheme allow operators to procure renewable energy directly from solar producers, supporting corporate net-zero commitments.

In addition, the upcoming Sustainable Data Centre Framework, alongside TNB’s Green Electricity Tariff (GET) and water management innovations, will further enhance Malaysia’s credentials as a low-carbon digital hub.

“Malaysia’s direction is clear — sustainability and digital growth will go hand in hand,” said Sum.

6. Malaysia’s Competitive Edge in the Asia-Pacific

Malaysia’s ability to combine cost efficiency, connectivity, renewable energy access, and regulatory stability positions it as one of Asia-Pacific’s most attractive alternative data centre destinations.

Johor, in particular, has benefited from spillover demand from Singapore, which continues to manage its own data centre moratorium. Proximity to the island’s subsea cable landing points and availability of industrial land have turned Iskandar Puteri and Sedenak into new data clusters.

“Malaysia’s location within ASEAN gives it a unique advantage. As AI and digital trade scale up, the country is well placed to anchor regional workloads,” Sum added.

7. Long-Term Growth Outlook

JLL expects Malaysia’s data centre sector to maintain a sustainable long-term growth trajectory, underpinned by:

Continued infrastructure investments from TNB and telecommunications providers;
Renewable energy integration through green power programmes; and
Maturing ecosystem capacity across engineering, construction, and project management.

By 2030, Malaysia is projected to join Asia-Pacific’s top five data centre markets, alongside Singapore, Japan, Australia, and India — with capacity likely surpassing 4,000MW.

Digital Infrastructure, Real Estate, and the Property Ripple Effect

The growth of data centres is also reshaping Malaysia’s property landscape, driving demand for industrial parks, logistics hubs, and high-spec buildings near major digital corridors.

Developers and REITs are increasingly repositioning portfolios to align with digital infrastructure value chains, from power and cooling supply to edge connectivity hubs.

As Sum concluded, Malaysia’s transformation into a regional data infrastructure powerhouse is not just about servers and cables — it’s about building the physical foundations of the country’s digital economy.