KUALA LUMPUR: The land acquired by Gamuda Bhd
at Springhill Industrial Park in Negeri Sembilan could support the development of data centre (DC) capacities of between 700-1,000 megawatts (MWs) based on two to three MWs per acre with a downward adjustment in net area, Hong Leong Investment Bank’s (HLIB) preliminary estimates show.
Assuming conservative construction costs of RM20 million per MW, potential long-term DC contracts could amount to RM14 billion-RM20 billion.
"We believe there is room to tweak our numbers depending on water and power infrastructure plans. On the whole, we expect the development to take place over multiple phases given the potential scale,” the investment bank in a note today.
On Monday, Gamuda said wholly owned subsidiary Gamuda DC Infrastructure Sdn Bhd had entered into a sale and purchase agreement with West Synergy Sdn Bhd to acquire 157.71 hectares (389 acres) of freehold, agriculture land for RM424.4 million cash, inclusive of an industrial title conversion premium.
West Synergy is a 60 per cent-owned indirect subsidiary of MUI Properties Bhd. Gamuda said it intends to develop cloud and data centre infrastructure on the plot which forms part of the Malaysian Vision Valley 2.0 development corridor.
The transaction is expected to be completed by end-July 2025 after fulfilling conditions precedent including MUI Properties shareholders’ approval.
HLIB said the purchase has little impact on Gamuda’s balance sheet due to a projected rise in retained earnings.
Meanwhile, RHB Investment Bank has estimated a potential DC capacity of 730MW, assuming 70 per cent of the land would be earmarked for DC development, giving a job valuation of RM15 billion.
"This is based on the DC benchmark that Gamuda is building in Elmina Business Park, which is roughly RM21 million per MW and 2.7MWs per acre (as per our calculations),” the investment bank said.
It expects an international multinational company to purchase the land but it is unclear as to the kind of structure Gamuda will be building.
RHB Investment Bank said Gamuda’s balance sheet should comfortably fund the acquisition; net gearing may reach 43 per cent from 39 per cent at end-October 2024.
"Recall that Gamuda’s internal gearing limit is 70 per cent,” it added.
Gamuda and MUI properties were among the top losers in the early trade.
As of 10.45 am, Gamuda shed five sen or 1.05 per cent to RM4.73 while MUI Properties declined 6.5 sen to 14.94 per cent to 37 sen. - Bernama
