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Johor leads Apac data centre boom as Malaysia tops construction — CW

Johor’s combined operational and planned data centre capacity reached 4,198 megawatts in the first half of 2026, making it the largest market in Asia Pacific, according to Cushman & Wakefield’s Asia Pacific Data Centre H1 2026 Update.

Source: EdgeProp Malaysia · August 27, 2026 at 10:02 AM · AI-assisted report

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Johor leads Apac data centre boom as Malaysia tops construction — CW
Image: edgeprop.my

JOHOR, PETALING JAYA, SOUTHEAST ASIA, SINGAPORE, MALAYSIA, ASIA-PACIFIC, 27 AUGUST 2026 —

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Johor Drives Asia-Pacific Data Centre Surge as Malaysia Leads Southeast Asia Construction

Market Impact

PETALING JAYA, Aug 27 — Johor has cemented its position as the largest data centre market in Asia-Pacific (Apac) by combined operational and future capacity, while Malaysia leads the region in data centre construction, according to global real estate consultancy Cushman & Wakefield (C&W).

In its Asia Pacific Data Centre H1 2026 Update, C&W reported that Johor recorded 4,198 megawatts (MW) of overall data centre stock in the first half of 2026, comprising 1,110MW of operational IT capacity, 602MW under construction, and 2,486MW in the planning stage. The consultancy defines overall stock as the sum of operational, under-construction, and planned capacity.

Johor’s operational IT capacity surged 24% from H2 2025, driven by the completion of additional hyperscale facilities. Capacity under construction nearly doubled from 315MW to 602MW, while planned capacity rose 19% to 2,486MW. C&W noted that the growing share of projects entering construction signals a shift from project announcements to large-scale delivery.

The distinction between "under construction" and "planned" capacity is critical. C&W defines "under construction" as IT capacity where site construction has begun and a ready-for-service date has been announced. "Planned" capacity, meanwhile, refers to projects announced by operators but where physical construction may not yet have started.

Johor’s combined under-construction and planned capacity expanded 29% to 3,088MW, reflecting sustained investment as developers advance large-scale projects to meet hyperscale and artificial intelligence (AI)-driven demand. Despite 212MW of new operational capacity coming online, colocation vacancy tightened to 0.7%, indicating near-immediate absorption of newly completed facilities.

C&W’s Asia Pacific Data Centre Maturity Index ranks Johor in its "Powerhouse" category alongside global hubs such as Tokyo, Beijing, Sydney, and Mumbai. The index evaluates 30 Apac markets based on overall stock (operational, under-construction, and planned capacity), vacancy rates, colocation presence, hyperscaler activity, and asset-level build capacity.

Johor’s dominance is further underscored by its industrial land market. C&W recorded three major land transactions in Johor during Q2 2026 involving data centre developers. Digital Edge Data Centers (Malaysia) Sdn Bhd, a subsidiary of Singapore’s Digital Edge (Singapore) Pte Ltd, acquired a 49.72-acre site in Bandar Cemerlang Industrial Park, Kota Tinggi, from Crescendo Corporation Bhd for US$85 million (RM346.53 million) in April.

Other transactions included Paragon Globe Bhd’s sale of a 65.28-acre site in Nusajaya to DayOne Data Centers Malaysia III Sdn Bhd for US$98 million, and Eco World Development Group Bhd’s disposal of a 49.59-acre site in Iskandar Malaysia to KNBDC Malaysia Five Sdn Bhd for US$71 million.

Johor’s momentum has been reinforced by the Johor–Singapore Special Economic Zone (JS-SEZ), which strengthens the state’s role as a strategic extension of Singapore’s capacity-constrained data centre market while enhancing cross-border connectivity and investment appeal.

C&W highlighted key developments, including Alibaba Cloud’s launch of a new Johor cloud region, AirTrunk’s plans for 280MW of new capacity, the topping out of Digital Halo’s first facility, and US$283 million in financing secured by DayOne Data Centers Singapore Pte Ltd for its Johor campus.

Johor’s rapid expansion is part of a broader Malaysian data centre construction wave. Southeast Asia had 2,382MW of data centre capacity under construction in H1 2026, nearly half of the Apac total. Malaysia led the region with 1,039MW under construction, followed by Thailand (859MW). Johor alone accounts for more than half of Malaysia’s current under-construction capacity with its 602MW.

C&W identified Malaysia as one of four Apac markets—alongside Australia, India, and Japan—on track to exceed 2GW of data centre capacity by 2028, based on current pipelines and development pace. The consultancy noted that Malaysia is attracting higher-value AI-grade deployments, while Indonesia and Thailand are absorbing overflow demand as land constraints and tighter policies limit growth in established hubs.

Across Apac, 1,372MW of new operational capacity came online in H1 2026, with another 7,103MW added to the development pipeline, bringing the regional pipeline to 26,455MW (comprising 4,764MW under construction and 21,691MW in planning). Despite this substantial supply increase, Apac vacancy edged down from 10.9% in H2 2025 to 10.3% in H1 2026, demonstrating the market’s ability to absorb new capacity amid strong demand.

However, the scale of the construction pipeline is reshaping the criteria for future data centre development. C&W described H1 2026 as a period of rapid but "power-constrained" execution for AI and cloud investments, with hyperscale capital expenditure accelerating even as electricity availability becomes a bottleneck. Capacity growth is shifting away from saturated hubs toward peripheral areas and new locations, making scalable power, developable land, and network connectivity key determinants of future investment.

For Johor, where the pipeline has expanded rapidly, the challenge is now managing sustainable growth. C&W noted that the state has introduced stricter sustainability requirements, including lower power usage effectiveness (PUE) and water usage effectiveness (WUE) thresholds, alongside tighter approval standards to prioritise efficient and high-value facilities over speculative developments. Operators face higher utility costs, minimum power-utilisation requirements, and expectations to secure alternative water and renewable-energy solutions as campuses scale up.

These measures may moderate the pace of future approvals in Johor but are expected to enhance the long-term resilience of its data centre ecosystem as the market transitions from rapid expansion to sustainable growth.

The report suggests that Johor’s rise and Malaysia’s leadership in Southeast Asian data centre construction are ushering in a new phase for the sector—one where the ability to deliver sufficient power, water, land, and connectivity will increasingly determine how much of the announced pipeline can progress into construction and operational status.

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Related: Cushman & Wakefield

Reporting based on EdgeProp Malaysia. Figures and claims are subject to revision as the story develops. DomainFork publishes editorial context, not investment advice — see our editorial standards.