Microsoft Buys Johor Data Centre Site as Hyperscalers Ramp Up in Malaysia

A data centre unit of Microsoft has agreed to buy its fourth land plot in Malaysia’s Johor state in less than a year under a MYR 119.8 million ($27.3 million) deal with local developer Crescendo Corporation.

Located in Johor Bahru’s Pulai district, the land measures 22.5 acres (9.1 hectares) and lies within Nusa Cemerlang Industrial Park, an estate surrounded by a mix of residential, commercial and industrial developments, Crescendo said Monday in a release.

The data centre unit, Microsoft Payments (Malaysia), previously acquired two land plots from Crescendo, a Kuala Lumpur-listed firm controlled by the Gooi family of Kim Loong palm oil fame, in transactions totalling MYR 447.6 million. The same unit of the tech giant agreed to buy a data centre site in Johor’s Kulai district from developer EcoWorld for MYR 402.3 million in a deal announced last June.

Crescendo stated that the Nusa Cemerlang sale would “unlock the value of the land at a reasonable price after taking into consideration the marketability and prospects of the land and the challenges in negotiating terms and securing a buyer with strong credentials and financial capability to complete the sale of such sizeable land expeditiously”, but no development plans were disclosed for the parcel, which is classed as agricultural.

Operators Queue Up

Johor-based Crescendo said the deal with Microsoft was negotiated after taking into consideration the developer’s recent sales of nearby land to buyers including Singapore firms STT GDC and Digital Halo, which signed deals for MYR 117 million and MYR 115.9 million, respectively.

Microsoft Payments (Malaysia) purchased a Pulai plot from Crescendo for MYR 315.2 million in a deal that closed last February and paid MYR 132.5 million for another site in a deal completed in May. The transaction announced this week is expected to close by the second quarter of 2027.

In May, US-based Microsoft said it would invest $2.2 billion over four years to support Malaysia’s digital transformation, representing the company’s single largest investment in its 32-year history in the country.

“Our investments in digital infrastructure and skilling will help Malaysian businesses, communities, and developers apply the latest technology to drive inclusive economic growth and innovation across the country,” Microsoft chairman and CEO Satya Nadella said at the time.

Hotbed Stays Hot

Malaysia secured MYR 141.7 billion ($31.6 billion) in digital infrastructure investments in the first 10 months of 2024 to solidify its standing as Southeast Asia’s top data centre hub, according to Knight Frank.

The result more than tripled the MYR 46.2 billion in approved investments for the entirety of 2023, the consultancy said. The year’s growth was led by $23.3 billion in investment from tech giants including Microsoft, Amazon Web Services, Google and Oracle.

Malaysia recorded an annual take-up of 429 megawatts of capacity, well ahead of regional rivals Indonesia (93MW), Thailand (31MW), Vietnam (3MW) and the Philippines (1MW), Knight Frank said in a research report. Demand was focused on Johor, near Singapore, while take-up also improved in the Klang Valley surrounding the capital region.

Google has begun building multiple facilities in Selangor state northwest of Kuala Lumpur under a collaboration with Sime Darby Property, and other players unveiling large Malaysia commitments last year included TikTok maker ByteDance, Amazon Web Services and database titan Oracle, which plans to invest more than $6.5 billion to set up its first public cloud region in the country.