Malaysia’s Johor has firmly established itself as Southeast Asia’s fastest-growing data center hub, with aggregate supply nearly doubling over the past 12 months to 5.8 gigawatts (GW) as of the second quarter of 2025, Knight Frank said Thursday.

The global property consultant said in its latest Asia-Pacific Data Center Report that backed by strong government support and the rollout of Malaysia’s national Data Center Planning Guidelines, Johor is anchoring Asia Pacific’s record-breaking expansion, which saw nearly 13GW of new project announcements in the first half of 2025 — a 160 percent increase year-on-year.

“Malaysia, and Johor in particular, is emerging as an important hub for digital infrastructure in the region. We’re seeing strong growth momentum, especially with the rise of cloud adoption and artificial intelligence (AI)-driven demand, which speaks to the market’s solid fundamentals,

“Looking ahead, ensuring that resources keep pace with this rapid growth will be key to sustaining momentum and reinforcing Malaysia’s role as a strategic base for long-term digital investment.” said Amy Wong, Head of Research and Consultancy, Knight Frank Malaysia.

According to the report, Johor’s rise reflects Malaysia’s strategic positioning in the digital economy.

In the first half of 2025 alone, the market recorded 260 megawatts (MW) of leasing activity, with demand overwhelmingly driven by social media (61 percent) and artificial intelligence (AI) workloads.

Its vacancy stands at just 1.1 percent, one of the lowest in Asia Pacific, underscoring the urgent need for power capacity and careful planning to meet surging demand.

“Johor’s trajectory has been nothing short of remarkable. In just 12 months, supply has nearly doubled to 5.8GW, supported by strong government planning guidelines and investor appetite,

“With vacancy levels as tight as 1.1 percent, the future expansion will be contingent upon power availability and sustainable growth. Johor is fast maturing into a prime hub, attracting not only social media platforms but also AI and cloud providers who see Malaysia as a long-term strategic base,” said Chelwin Soo, Director, Land and Industrial Solutions, Knight Frank Malaysia.

According to the report, the government’s proactive stance — through national guidelines and policy support — is enabling developers and investors to navigate land and energy challenges more effectively.

This alignment has placed Malaysia at the center of hyper scaler decision-making, as providers look for locations that balance long-term runway with immediate scalability.

Meanwhile, across the region, technology giants and investors continue to deploy record capital.

In 2025 alone, hyper scalers including AWS, Microsoft, Google, and Meta have committed over $160 billion globally, with a significant share flowing into Asia Pacific markets.

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 Fred Fitzalan Howard, Head of Data Centres, Knight Frank Asia Pacific.

While Tokyo, Melbourne, Seoul, and Mumbai continue to attract strong activity, Johor’s rapid rise, coupled with Malaysia’s national-level alignment, makes it a focal point in the Asia Pacific data center ecosystem, said the report.

With capacity tight and demand accelerating, it noted the next wave of investment will depend on how effectively Malaysia and the region can synchronize technological needs with energy availability — building infrastructure that is both flexible and future-ready.

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