UEM Sunrise Selling Malaysia Data Centre Plots for $30M, Deal Linked to Singtel

UEM Sunrise has agreed to sell two parcels of land in Johor state to a “global data centre player” for MYR 144.9 million ($30.7 million), the Malaysian developer said Tuesday.

Located in Iskandar Puteri’s East Ledang township west of Johor Bahru, the freehold plots measure 11.7 hectares (28.9 acres) in total and will be developed into a data centre expected to feature cutting-edge technologies, UEM Sunrise said in a release. The buyer wasn’t identified, but an account in The Edge Malaysia on Wednesday linked the deal to Singtel, citing sources indicating that the Singapore telecom carrier is planning a data centre in Iskandar Puteri.

Last July, Johor’s head of government, Onn Hafiz Ghazi, reported on Facebook that Singtel was pursuing a new data centre in the state after the telco had announced in 2022 that it was planning to develop an ASEAN-wide digital infrastructure network.

The land disposal comes after the property arm of state-controlled UEM Group joined forces with Sydney-based Logos last month on a plan to build a data centre campus in Johor with up to 360 megawatts of capacity. UEM Sunrise CEO Sufian Abdullah said the company’s landbanks in southern Malaysia were positioned to benefit from proximity to Singapore and growing investment in Iskandar Puteri.

“As we re-evaluate our remaining landbank potential, this divestment and monetisation strategy sets the groundwork for substantial technological, economic and community advancements in Johor,” Sufian said.

Strategic Sweet Spot

The proposed project with Logos — the first data centre announced by the industrial specialist in the country — will occupy a 30 hectare (74 acre) site in Iskandar Puteri’s Gerbang Nusajaya township.

Johor Bahru’s strategic location near Singapore, coupled with Malaysia’s digital infrastructure plans and government support, makes the area a prime hub for the sector in Southeast Asia, said Paul Dwyer, head of data centres for Logos, a unit of Hong Kong-listed ESR.

“This growth is exciting, and we look forward to working in partnership alongside UEM Sunrise and being a key player in this dynamic market,” Dwyer said.

In addition to its nascent Malaysia venture, Logos has a partnership with the UK’s Pure Data Centres on the development of a 20MW facility in Indonesia, the Australian firm’s first-ever server facility.

State of Enthusiasm

Increased activity in Johor has helped push Malaysia to the top of the list of APAC’s fastest-growing data centre markets, according to a report by Cushman & Wakefield.

Johor’s Sedenak Tech Park is the site of Singapore-based Princeton Digital Group’s planned 150MW data centre campus, with the Warburg Pincus-backed firm due to start operations at the 60MW first phase in the second quarter of this year.

Shanghai-based GDS, which kicked off its Southeast Asia expansion in Malaysia in 2021 with a 54MW hyperscale facility at Johor’s Nusajaya Tech Park, is also co-developing eight facilities with 168MW of capacity in Johor with partner YTL Power International.

With a development pipeline of 1.2GW, Malaysia can expect 600 percent growth in the next five years from its current operational capacity of 189MW, the Cushman report said.