Funding Gains Pace for SE Asia’s New Data Centers

Data centers across Southeast Asia have been witnessing investment boom, with Malaysia emerging as regional hub for data centers, and Johor-Singapore Special Economic Zone bordering Singapore has been attracting investors from around the world.

While Bain Capital-owned Bridge Data Centers borrowed $2.8 billion, DayOne properties, previously GDS International, raised $3.4 billion for developing data centers in Malaysia. Besides, as many as 30 data center projects are either underway or completed, and another 20 are awaiting approvals from the authorities.

According to a report from Reuters, Microsoft is set to launch its first cloud region in Malaysia with three data centres by mid-year, the company said last week.

Microsoft Malaysia Director Laurence Si told reporters that the data centres, known as the Malaysia West cloud, will be located in the greater Kuala Lumpur area and will start operations in the second quarter this year.

Some of the major reasons for these data centers coming up in Malaysia is the cheap availability of land and energy compared with cities like Singapore and Hong Kong where these resources are limited.

Thailand

Even in Thailand, work is taken up to construct new buildings as Thailand Board of Investment (BOI) has approved $2.7 billion to develop three data centers in the country.

The three data centers, one each proposed by Beijing Haoyang Cloud&Data Technology, Empyrion Digital, and GSA Data Center 02, with a total capacity of 350 MW.

While Beijing Haoyang Cloud&Data Technology is planning to invest $2.164 billion in developing a 300 MW data center in WHA Eastern Seaboard Industrial Estate 4 in Rayong Province, the Singapore-based Empyrion is planning to invest $140.5 million in a 12MW data center located in Bangkok.

The third one is home-grown GSA Data Center 02 Co. Ltd. will spend $401.9 million on a 35 MW data center in Chonburi Province.

Earlier this month, TikTok committed to investing $8.8 billion over the next five years in data centers in Thailand. AWS launched a cloud region in Thailand earlier this year, and Alibaba Cloud also launched a second data center in the country in February.

Even Google has announced Thai cloud region in August 2022, and in September 2024 the US tech giant said that it planned to spend $1 billion on cloud and data infrastructure in the country. Microsoft also plans to build a data center region in Thailand.

In November 2024, the Board of Investment approved close to $1.8 billion in data center projects in Thailand, including a data center for Google and another by GDS subsidiary DigitalLand Services.

According to real estate services firm Cushman and Wakefield, the demand for data centers is expected to grow by 32% per annum through 2028 compared with the US, where demand is set to grow by 18%.