Singapore spillover of data centres benefits Malaysia’s Johor

The trend comes ahead of an expected announcement of a special economic zone between both sides

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The surge in data centre business in Johor has also driven up property transactions in the Malaysian state. Photo: EPA-EFE

Published: 12:24pm, 27 Nov 2024Updated: 12:35pm, 27 Nov 2024

Businesses in Johor are reporting a boom driven by new data centres pivoting from being based in Singapore, industry insiders say, as Kuala Lumpur looks to banish long delays in developing the Malaysian border territory.

Johor ranked 2024’s fastest-growing data centre market in Southeast Asia, according to UK-based data centre market intelligence firm DC Byte, benefiting from Singapore’s moratorium on new data centres imposed five years ago as the city state grappled with heavy energy and water demands.

Malaysia drew about US$26.6 billion in approved data centre investments between 2021 and 2023, according to government data, at least a quarter of which went to Johor.

This includes investments by Singapore-based conglomerates such as the Princeton Digital Group, which is seeking to expand its data centre footprint across Johor to the north and Indonesia’s Batam island to its south.

As demand for data centres – which are vital repositories for cloud computing and increasingly artificial intelligence – surges, Malaysian companies across the supply chain have also pivoted their businesses.

“We are having a problem meeting demand,” said Nicholas Boey Kok Cheng of Johor-based logistics firm Professional Packers & Movers.