Moody's Ratings highlighted Malaysia's emerging prominence in the data centre industry, spurred by increased investment following Singapore's moratorium on new data centre construction and expansion due to land constraints.

According to a recent research note, Malaysia is experiencing heightened interest in data centre development, particularly in Johor, where Microsoft recently acquired land for a new facility from Eco World Development Group Bhd.

GDS Holdings Ltd, a major data centre developer, has already committed approximately US$3 billion to establish two data centres in Johor's tech park.

Additionally, global tech giants like Google and Amazon have pledged significant investments of US$2 billion and US$6 billion respectively by 2037 for data centres and cloud services in Malaysia.

Moody's predicts substantial growth in data centre capacity across the Asia Pacific (Apac) region, expecting it to more than double by 2028, driven by escalating demand for artificial intelligence (AI), cloud technologies, cryptocurrencies, and outsourced data computing and storage.

Apac's data centre capacity is forecasted to grow at a compound annual rate of nearly 20% through 2028, reaching approximately 24,800 megawatts, up from the current 10,500 megawatts. This expansion entails an investment exceeding US$564 billion by 2028, with Apac contributing about 30% to global capacity expansion.

Emerging markets such as India, Indonesia, Malaysia, Thailand, and the Philippines are anticipated to experience particularly rapid growth rates of 29% to 48% in data centre capacity through 2025. This growth is bolstered by lower existing capacity levels, governmental digital initiatives, and robust investor support.

Moody's Ratings emphasised Malaysia's strategic advantage in capitalizing on the burgeoning demand for data centres in the region, driven by geopolitical shifts and technological advancements propelling sectoral growth.