Australia’s NEXTDC Ltd has announced plans to invest RM3 billion in the development of Kuala Lumpur 1 (KL1), a Tier IV-certified data center. It is NEXTDC’s first step into Asia.
According to local reports, the KL1 data center, with a capacity of 65 megawatts (MW), will cater to cloud platform providers, enterprises, and government customers throughout Malaysia. It is set to become the first Tier IV accredited data center in Peninsular Malaysia with a capacity above five MW.
NEXTDC, a technology company listed on the Australian Securities Exchange 100 index, already operates an extensive network of Tier IV data center facilities across Australia.
Analysts anticipate that Malaysia will become a major Asian hub for data centers, with supportive pro-business policies to attract and retain data center investors. According to a local research house, the New Investment Policy, which the Ministry of International Trade and Industry (MITI) unveiled in October 2022, seeks to increase economic complexity to foster high-value job possibilities, further supports the sector’s positive outlook.
Malaysia has a significant amount of skilled and experienced personnel, which bodes well for attracting more foreign direct investments, which are essential for the data center industry.
Over the next five years, the country is expected to experience a wave of new and developing data center investments totaling more than 800MW in capacity, with cheaper land and energy costs serving as the main drivers.
Earlier this year, AirTrunk announced its entry into the country with plans to develop a 150+MW data center which will be the company’s first in Malaysia and ninth in APJ, taking its data center platform to over 1.35GW of capacity. Additionally, Gaw Capital Partners and A3 Capital formed a joint venture platform with the launch of the first Infinaxis data center in the country.
MN Holdings Bhd partnered with China’s Shanghai DC-Science Co Ltd to work together on building a high performance data center in Malaysia with the project being valued at an estimated US$600m.
DigitalBridge Group also invested in a multi billion ringgit data center project in the country.
In May, AIMS Group announced the construction of AIMS Cyberjaya Block 2 and Acronis has opened its first cyber cloud data center in Kuala Lumpur to meet the overwhelming demand for data center space in Malaysia.
