KUALA LUMPUR: Malaysia has strengthened its position as Southeast Asia's leading digital hub, attracting a total of RM141.72 billion in digital investments during the first 10 months of the year.
This was a threefold increase from RM46.2 billion achieved in 2023.
These investments are expected to create 41,078 job opportunities, Knight Frank Malaysia said after releasing its Data Centre Research Report 2024 today.
The report said Malaysia has once again rank first in its SEA-5 Data Centre Opportunity Index, having recorded a significant annual take-up of 429 megawatt (MW) to outperform regional peers.
The strong demand can be attributed to the significant take-up recorded in Johor and the improved take-up in Klang Valley.
As of end 2024, the country hosts 54 operational data centres offering a 504.8 MW capacity, with Johor leading in IT capacity and Klang Valley remaining a core market. Emerging hubs include Sarawak, Negri Sembilan and Kedah.
Malaysia's sustained leadership in the SEA-5 market is attributed to its efforts to enhance digital infrastructure, investor-friendly policies, and substantial investments from global tech giants, driven by strategic investments from tech giants like Microsoft, Amazon Web Services (AWS), Google, and Oracle, totaling US$23.3 billion (RM104 billion).
Knight Frank Malaysia group managing director Keith Ooi said the nation's strategic efforts in digital infrastructure are a blueprint for the region and also a call for global players to seize this unparalleled opportunity.
"The country's commitment to technological innovation and sustainability makes it a preferred destination for data centre investments and a model for economic resilience," he said in a statement.
Executive director of research and consultancy Amy Wong said the country's position at the top of the index for two consecutive years underscores its regional leadership in the data centre industry.
"With an impressive annual take-up of 429 MW and a gross domestic product (GDP) growth forecast of 5.5 per cent for 2025, Malaysia's robust infrastructure, strategic investments, and forward-looking policies continue to set it apart.
"This dominance not only reinforces its competitive edge in Southeast Asia but also signals the nation's readiness to sustain long-term growth in the digital economy," she said.
According to Knight Frank Malaysia, the government's proactive measures, including the Green Lane Pathway and the Corporate Renewable Energy Supply Scheme (CRESS), are instrumental in shaping a resilient data centre ecosystem.
By significantly reducing timelines for electricity supply and promoting renewable energy adoption, these initiatives enhanced infrastructure readiness and reflect the country's commitment to sustainability and technological advancement.
Meanwhile, Juwai IQI co-founder and group chief executive officer Kashif Ansari said the influx of RM141.72 billion data centre investments in 2024 has boosted demand for land zoned for industrial and commercial uses in Johor and the Klang Valley where prices have climbed by as much as 20 per cent in the most suitable locations.
"The construction of data centers created a ripple effect and boosted demand for local contractors, suppliers, and skilled labor, which has further energized the property and construction sectors," he told Business Times.
In 2025, Kashif said further growth in the data centre market will push land prices higher.
Beyond the demand for the land the data centres actually sit on, he said this influx of capital and the 40,000 jobs will also drive indirect demand in the office and residential markets.
"Data centres are a golden opportunity for Malaysia. They create good jobs, boost asset values, cause a boom in related businesses, and deliver income to the government via taxes.
"Once operational, the typical large data centre pays annual wages of RM35 million and supports RM146 million of annual economic activities, and pays RM4.9 million in government taxes and fees," he added.