Description
The narrative around the Johor data centre market has quickly transitioned from being an overflow scenario for the Singapore market to being seen as the first and most important AI data centre hub in the Asia-Pacific region. The growth in Johor was initially triggered by the data centre build pause put in place by the Singaporean government, which effectively halted the development of new data centre supply. And while the moratorium was recently lifted, new data centre expansions will be subject to close scrutiny and probably be limited to a certain subset of operators. This will open the door to more self-builds from hyperscalers, which will have implications for colocation demand.
Given the current constraints in data centre supply impacting the Singapore market, the logical question is what next given that demand is accelerating as a new wave of AI-related infrastructure begins to roll out. Enter the overflow scenario. And in the context of Singapore, two nearshore locations have emerged – Johor in Malaysia and Batam in Indonesia – to try and accommodate the demand that Singapore will be less and less equipped to serve over the long-term.
The overflow scenario is still a relatively new development and the initial wave of demand is being driven by hyperscale cloud platforms. In Singapore, this has been led by China-based hyperscalers that typically do not self-build outside China and have not planned for future growth as diligently as their US counterparts. The overflow scenario is a good fit for the China-based hyperscalers and they have driven the first wave of expansion. But the US-based hyperscalers are going to follow suit as their requirements continue to expand, and expansion runway in Singapore will increasingly be hard to come by.
Hyperscale cloud demand will continue to drive the market, but AI has the potential to accelerate things in an aggressive direction. Places like Johor are uniquely positioned to serve large-scale AI workloads in a commercially viable and scalable model, while being proximate enough to enable core-edge deployment separation.The Johor and Batam overflow markets are still in their early stages of development. But the potential is there and a pipeline of over 2,000MW (or 2GW) is currently in various stages of development. This is a market geared towards hyperscale capacity and the average data centre build size is 29MW. These builds will soon start to come online, and the combination of hyperscale cloud and AI threatens to push demand to a level where there could even be shortfalls. It is a truly wide open market and the long-term upside is real.
This report is an excellent resource for any service provider, investor or enterprise end user looking to understand and project the data centre market in Johor and Batam or find a service provider. The methodology applied continues to be the most robust in the industry. We track supply on a space and power basis, split all the metrics along retail and hyperscale lines, and aggregate inventory in multiple tiers according to build status, absorption rates and maximum capacity levels. Hyperscale cloud nodes and on-ramps are mapped and a complete directory is provided.
