KUALA LUMPUR: Credit rating agency Fitch Ratings foresees tremendous growth in data centres in Johor, with operating capacity to possibly reach up to 5,000 megawatts (MW) in 2029.

Its head of Asia-Pacific infrastructure and project finance ratings Sajal Kishore said Johor’s potential capacity growth is huge, recording about 1,400 MW in 2024 against 10 MW in 2021 due to its resources and proximity to Singapore.

"Johor has essential resources such as land, water and power, and does so at a significantly lower cost. This combination reduces operational expenses and makes the state an increasingly attractive location for large-scale investments.

"We are closely observing Johor as it effectively serves as a ‘Singapore-plus-one’ destination. The round-trip distance from Singapore to Johor is under 90 kilometres (km), translating into an ultra-low latency of just one to two milliseconds, which works well for cloud computing,” he said at a webinar "Fitch Approach for Data Centre (APAC)” today.

Nonetheless, Sajal noted that Malaysia is beginning to see early signs of constraints with growing discussions in the country on the broader implications of this growth.

"A key concern raised is how much Malaysia benefits, given that many of the main revenue counterparties are based in Singapore.

"This has sparked conversations on whether the country should actively develop alternative locations beyond Johor. Looking ahead, we anticipate the country to face supply constraints as demand continues to rise,” said Sajal.

Johor has emerged as Malaysia’s leading data centre investment hub with 42 projects worth RM164.45 billion approved as of the second quarter of 2025, creating over 6,000 job opportunities. 

The state also projects to house six per cent of Malaysia’s data centre capacity by 2030. - Bernama