The Knight Frank Asia Pacific Data Centre Report pointed out that customer demand is shaping delivery timelines for DCs in Malaysia.
PETALING JAYA: Johor has established itself as South-East Asia’s fastest-growing data centre (DC) hub, with total capacity nearly doubling in the past year to 5.8 gigawatts (GW) as of the second quarter of financial year 2025, according to Knight Frank.
This includes 2GW of new project announcements, backed by strong government support and the rollout of national Data Centre Planning Guidelines.
The growth cements Malaysia’s southern state as a critical anchor in Asia Pacific’s record-breaking expansion, which saw almost 13GW of new project announcements in the first half of financial year 2025 (1H25), a 160% increase from a year earlier.
Johor alone saw 260 megawatts (MW) of leasing activity in 1H25, with demand overwhelmingly driven by social media (61%) and artificial intelligence (AI) workloads.
Vacancy stands at just 1.1%, one of the lowest in the Asia Pacific.
“With vacancy levels as tight as 1.1%, the future expansion will be contingent upon power availability and sustainable growth.
“Johor’s trajectory has been nothing short of remarkable,” said Knight Frank Malaysia director of land and industrial solutions Chelwin Soo.
Singapore’s strict planning controls have pushed global technology firms and DC operators to look across the border, with Johor emerging as the top alternative due to its proximity and strong connectivity.
The Knight Frank Asia Pacific Data Centre Report also pointed out that customer demand is shaping delivery timelines for DCs in Malaysia.
Many Chinese clients now require nine- to 11-month build times and quick move-ins.
“To meet these expectations, prefabricated builds are increasingly prevalent.However, the onset of the third quarter saw new power tariffs aimed at DCs that could see costs rise by 10% to 14%,” added the report.
In the Johor DC market, Bridge Data Centres and DayOne are the leading operators. They collectively manage 58% of the market’s built information technology capacity. They are also major contributors to current development, with DayOne and Bridge Data Centres responsible for 24% and 17% of the capacity under construction, respectively.
Knight Frank said these two players are performing well due to affordable and faster builds, as they can leverage Chinese supply chain mechanisms.
In terms of the future pipeline – both committed and early-stage – Microsoft holds the largest potential share, with 600MW in progress if fully built out.
With the strong DC growth in Malaysia, Knight Frank said land parcels in major tech parks are now scarce.
In fact, the next phases of these parks are already being booked.
Across the Asia-Pacific region, technology giants and investors continue to deploy record capital. In 2025 alone, hyperscalers including AWS, Microsoft, Google, and Meta have committed over US$160bill globally, with a significant share flowing into the Asia-Pacific markets.
Knight Frank said infrastructure funds and private equity groups are also partnering with operators to accelerate time-to-power deployment, particularly in Tier 1 hubs where grid capacity remains a binding constraint.
“The sheer scale of new projects highlights how critical Asia Pacific has become in the global digital infrastructure landscape.
“Operators are being asked to build facilities that can flexibly support both cloud and AI workloads, which is now a decisive factor in site selection.
“Locations like Johor that combine supportive policies with sufficient power runway are in a strong position – but ensuring synchronisation between technology evolution and energy supply remains the ultimate challenge,” said Knight Frank Asia Pacific DCs head Fred Fitzalan Howard.
Across the region, Tokyo (Japan), Melbourne (Australia), Seoul (South Korea), and Mumbai (India) also continue to attract strong DC activity.
Tokyo, for example, recorded aggregate DC capacity at 4.2GW in 1H25, with vacancy at 7%. In Melbourne, supply nearly tripled to 4.7GW. Live vacancy stands at 4.5%.
With capacity tight and demand accelerating, Knight Frank said the next wave of investment will depend on how effectively Malaysia and the region can synchronise technological needs with energy availability – building infrastructure that is both flexible and future-ready.
