Malaysia is "best placed to get the lion's share" of new data centre development among Asean emerging markets, according to Maybank in its Asean Data Centre report published on Tuesday.
This is on the back of competitive data centre construction cost and average electricity tariff, coupled with a supportive regulatory environment from streamlined approval processes to conducive framework for data centre operations, according to the report.
Citing Maybank IBG Research and DCByte's data, Malaysia's under construction (159 data centres), total committed (766) and total early stage (2,016) are the highest among Asean countries.
Its total early stage data centre project count is also the second highest across Asia-Pacific, behind India's 3,224 units.
On this, Maybank said that the industry's oversupply concerns are overhyped, and early stage announcements "will hit the ground based on demand development".
"Granular analysis shows that average data centre capacities in large markets like Kuala
Lumpur and Jakarta are modest at just 9MW/facility vs large announcements in 100MW to GWs," it said.
Other factors in play include incentives offered by local governments such as the current data centre hot spot Johor, which may include tax breaks, grants and expedited development approvals.
The report also touched on Johor’s water-reserve margins (the difference between production capacity and usage) which it described as being at a "comfortable" 16.9%.
"On the other hand, [water reserve margins in] Selangor/Kuala Lumpur/Putrajaya is also at a comfortable level of 15.3%," it said.
"While it’s difficult to estimate the water availability in cities such as Jakarta, Bangkok and Kuala Lumpur, we estimate the water requirement of the upcoming pipeline of data centres relative to the cities’ overall water needs is [around] 1%, and as such it’s not a material strain on these cities’ water infrastructure," it added.
