Johor data centers are booming with over $40 billion in investments as of Q2 2025, driven by Malaysia’s sovereign wealth fund Khazanah Nasional positioning UEM Group to develop land and clean energy infrastructure, aiming to host 60% of the nation’s facilities by 2030 and support industrial growth.
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Johor has attracted 164.45 billion ringgit ($40 billion) in data center investments through Q2 2025, establishing it as a key Southeast Asian hub.
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UEM Sunrise Berhad, a UEM Group subsidiary, controls nearly 4,600 acres of prime land ideal for expanding data center operations.
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Analysts project Johor will accommodate 60% of Malaysia’s data centers by 2030, fueled by a new special economic zone and proximity to Singapore.
Explore Johor data centers’ rapid growth with $40B investments and UEM’s clean energy push. Learn how Malaysia’s infrastructure supports tech expansion—read now for key insights on future opportunities.
What are Khazanah Nasional’s plans for Johor data centers?
Johor data centers are at the forefront of Malaysia’s digital infrastructure push, with Khazanah Nasional Berhad directing its infrastructure arm, UEM Group Berhad, to leverage vast land holdings for industrial spaces and sustainable energy solutions. Managing Director Amran Hafiz Affifudin emphasized this strategy in a recent interview, highlighting UEM Sunrise Berhad’s 4,600 acres in Johor as a foundation for data center development. This initiative aligns with Johor’s emergence as an investment magnet, drawing $40 billion in commitments by mid-2025.
The focus stems from Johor’s strategic advantages, including its new special economic zone linked to Singapore, which enhances connectivity and appeal for tech giants. UEM Group’s efforts aim to address the surging demand for reliable power and space, positioning the state to capture a dominant share of Malaysia’s data center market. By integrating green energy, these plans mitigate resource strains on the national grid while fostering long-term economic benefits.
How is UEM Group utilizing green energy for Johor data centers?
UEM Group’s green energy subsidiary, UEM Lestra Berhad, is spearheading sustainable initiatives to power Johor data centers, including a planned 1-gigawatt hybrid solar plant funded by investors like Macquarie Group and I Squared Capital Advisors. The first phase, a 500-megawatt facility costing 2.5 billion ringgit, is set to break ground soon, providing clean electricity essential for data center cooling and operations. Amran Hafiz Affifudin noted that this aligns with broader industrial needs, such as water treatment for cooling systems, which UEM is also exploring.
According to a recent industry outlook from BMI, a Fitch Solutions company, Malaysia ranks among Asia’s top three data center growth markets, with power demand projected to rise sharply through 2028 due to facility expansions. This growth strains land and grid resources, making renewable commitments critical—especially as data center operators prioritize sustainability. UEM Lestra’s biogas and solar projects, including a fully utilized 350-megawatt facility at Kulim Hi-Tech Park serving semiconductor firms like Infineon Technologies AG and AT&S, demonstrate proven capacity. Last year, Lestra acquired a majority stake in Nur Power, Malaysia’s sole independent power utility, and committed 1.5 billion ringgit to cut carbon emissions in industrial parks by 2026.
Amran expressed confidence in scaling operations, such as upgrading the Kulim plant to 1 gigawatt pending regulatory approval, and integrating biogas into the national grid for wider distribution. These steps not only support Johor data centers but also reflect UEM’s shift from traditional property and roads to green infrastructure, ensuring resilience amid rising energy demands. For the Gerbang Nusajaya Industrial Park, a 40-acre renewable-powered zone is in planning stages, tailored for high-tech industries including data processing.
BMI’s report underscores the challenges: while Malaysia’s renewable focus accelerates clean energy adoption, securing sufficient land and grid upgrades remains vital. UEM’s land bank and investor partnerships position it advantageously, potentially driving profitability surges in 2025 and beyond, as Amran anticipates from ongoing deals.
Frequently Asked Questions
What investments have driven the growth of Johor data centers?
Johor data centers have seen 164.45 billion ringgit ($40 billion) in investments as of Q2 2025, propelled by the state’s special economic zone and infrastructure developments. This influx, analyzed by industry experts, underscores Johor’s role as a regional hub, with projections for 60% of Malaysia’s data centers by 2030, supported by UEM Group’s land and energy assets.
Why is green energy crucial for expanding Johor data centers?
Green energy is essential for Johor data centers because it meets the massive power needs for cooling and operations while addressing grid strains and sustainability goals. UEM Lestra’s solar and biogas projects, like the upcoming 500-megawatt plant, ensure reliable, low-carbon supply—vital as operators commit to renewables and Malaysia’s market grows rapidly through 2028, per BMI forecasts.
Key Takeaways
- Johor’s investment surge: With $40 billion committed by Q2 2025, the state is set to dominate Malaysia’s data center landscape, hosting 60% by 2030 through strategic zoning and connectivity.
- UEM’s land advantage: Owning 4,600 acres via UEM Sunrise enables tailored industrial parks, including a 40-acre renewable zone at Gerbang Nusajaya for efficient data center support.
- Sustainable energy focus: UEM Lestra’s 1-gigawatt solar plant and biogas upgrades will slash emissions and boost profits, aligning with Asia’s top-tier growth and regulatory approvals.
Conclusion
Malaysia’s Khazanah Nasional is strategically advancing Johor data centers through UEM Group’s integration of vast land assets and green energy solutions like solar plants and biogas facilities. This positions Johor as a powerhouse for digital infrastructure, addressing power demands highlighted by BMI while promising enhanced profitability for UEM in 2025 and 2026. As investments continue to flow, stakeholders should monitor these developments for opportunities in sustainable tech expansion, ensuring Malaysia remains competitive in Asia’s booming data sector.
