PETALING JAYA: Johor has firmly established itself as Southeast Asia’s fastest-growing data centre hub, with aggregate supply nearly doubling over the past 12 months to 5.8GW as of second-quarter 2025, according to the latest Knight Frank Asia-Pacific Data Centre Report.
Backed by strong government support and the rollout of Malaysia’s national Data Centre Planning Guidelines, Johor is anchoring Asia-Pacific’s record-breaking expansion, which saw nearly 13GW of new project announcements in first-half 2025 – a 160% increase year-on-year.
Knight Frank Malaysia head of research and consultancy Amy Wong said Malaysia, Johor in particular, is emerging as an important hub for digital infrastructure in the region.
“We are seeing strong growth momentum, especially with the rise of cloud adoption and 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.”
The report showed that for Johor, supply doubled to 5.8GW, with 260MW of take-up, 61% of which came from social media platforms. Vacancy stood at just 1.1%, reflecting power and planning constraints.
Furthermore, the report stated that Johor’s rise reflects Malaysia’s strategic positioning in the digital economy.
In the first half of 2025 alone, the market recorded 260MW of leasing activity, with demand overwhelmingly driven by social media (61%) and artificial intelligence (AI) workloads.
The vacancy rate stands at just 1.1%, one of the lowest in the Asia-Pacific, underscoring the urgent need for power capacity and careful planning to meet surging demand.
Knight Frank Malaysia land and industrial solutions director Chelwin Soo said 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%, 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.”
The report also noted that 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 positioned Malaysia at the centre of hyperscaler decision-making, as providers seek locations that strike a balance between long-term runway and immediate scalability.
Across the region, Knight Frank’s report noted that technology giants and investors continue to deploy record capital.
In 2025 alone, hyperscalers, including AWS, Microsoft, Google and Meta, have committed over US$160 billion (RM674 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.
Knight Frank Asia Pacific head of data centres Fred Fitzalan Howard said the sheer scale of new projects highlights how critical the 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.”
While Tokyo, Melbourne, Seoul and Mumbai continue to attract strong activity, Knight Frank’s report noted that Johor’s rapid rise, coupled with Malaysia’s national-level alignment, makes it a focal point in the Asia-Pacific data centre ecosystem.
With capacity tight and demand accelerating, the next wave of investment will depend on how effectively Malaysia and the region can synchronise technological needs with energy availability – building infrastructure that is both flexible and future-ready.
