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AREA Group purchases 150 acres for Malaysia data centre campus

Written by Thu 12 Jan 2023

Real estate and investment advisor, AREA Group, has agreed to purchase 150 acres of land in Malaysia. This property is intended to become a large campus housing data centre facilities.

The Heads of Agreement (HOA) document, signed with Northern Gateway, outlines AREA Group’s plans to acquire and develop an industrial parcel of land in the Delapan Special Border Economic Zone. The project has an estimated gross development value (GDV) of €3.19 billion (RM 15 billion).

Datuk Stewart LaBrooy, chairman of AREA Advisory, added that the data centre development will be developed to meet green sustainability initiatives for reducing the total carbon footprint of the data centre campus.

“We are excited about our HOA with Northern Gateway, as we can now proceed to start work to promote and develop next-generation data centres at Delapan, which has ample access to sufficient and scalable utilities required for energy, water, and network capacity,” said LaBrooy.

Slated to commence development in Q4 of 2023, the data centre facilities will be designed and constructed to meet Tier III and Tier IV certification from the Uptime Institute.

“The development aims to be a catalyst for high-value job creation among the clients of cloud services and storage as well as encourage manufacturers of data centre equipment and servers to localise production, which will in turn create more jobs and grow the local economy,” added LaBrooy.

The Delapan Special Border Economic Zone (SBEZ) is located in Kedah state, on the border of Thailand and Malaysia. Previously known as the Kota Perdana SBEZ, Delapan SBEZ spans 4,300 acres and is centrally located near the Commercial and Business District, the Inland Transport and Logistics Hub, and the Keda Science Technology Park.

Industry investors are looking to develop infrastructure to support the increasing digitisation and demand for services in the country. Malaysia’s data centre market is projected to grow at a CAGR of 7% from 2022-2027, attracting $2 billion in investment. This growth is driven by a number of factors including the country’s high internet penetration and solid connectivity, including more than 20 submarine cables connecting Malaysia to APAC and African locations. Additionally, the Special Economic Zones are supported by governmental tax benefits, making them even more attractive to investors.

Last year, Open DC and NGX signed a deal to build a Tier III data centre in the area. And just last month, Equinix announced a $40 million investment in a new IBX data centre in Johor.

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Written by Thu 12 Jan 2023

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