Malaysia’s policy push turns Johor into top Asia Pacific data centre destination
KUALA LUMPUR, Sept 25 — Johor’s transformation into Southeast Asia’s fastest-growing data centre hub is being driven by robust government policies and strategic national planning.
The state’s aggregate capacity nearly doubled to 5.8 gigawatts (GW) in the 12 months leading to the second quarter of 2025, a development described as “nothing short of remarkable” in Knight Frank’s latest Asia-Pacific Data Centre Report.
Amy Wong of Knight Frank Malaysia highlighted that the national Data Centre Planning Guidelines have been central to this success, enabling developers to navigate land and power challenges.
“Government planning and policy support are key enablers of Malaysia’s rise as a strategic digital hub,” she said.
The demand is tangible: Johor recorded 260 megawatts (MW) of leasing activity in the first half of 2025, with social media platforms driving 61 per cent of this take-up.
Consequently, the vacancy rate remains one of the lowest in the region at just 1.1 per cent, underscoring the urgent need for more power capacity to sustain this growth.
Knight Frank’s Chelwin Soo said Johor’s future expansion will hinge on how effectively power availability and sustainability are addressed.
This national policy alignment has positioned Malaysia as a top choice for hyperscalers seeking scalable and future-ready locations.
Across the Asia-Pacific region, major players like AWS, Microsoft, Google, and Meta are deploying record investments, committing over US$160 billion globally this year alone.
Fred Fitzalan Howard, head of data centres at Knight Frank Asia Pacific, said governments that synchronise energy and technology needs will attract the next wave of investment.
The growing focus on cloud and AI workloads is reshaping site selection priorities, driving unprecedented infrastructure spending.
Malaysia’s strategic planning and proactive policies are now positioning Johor as a cornerstone of the region’s digital infrastructure landscape.
With demand accelerating, Knight Frank said the ability to match power supply with AI-driven growth will define Malaysia’s leadership in the next phase of the data centre boom.
