Sime Darby Property is in talks with banks for a loan of up to 3 billion ringgit (US$714 million) to finance a data center that will be leased to Google.

Sime Darby Property is a Malaysian developer and part of one of the country’s largest multinationals.

The loan is expected to have a five-year term, with an option to extend for up to two years, though terms may change.

Google announced in 2024 it would build a data center at Sime Darby’s Elmina Business Park near Kuala Lumpur, as part of a US$2 billion investment in Malaysia.

The surge in AI-related demand has increased data center development and financing in Asia.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Southeast Asia’s data center investment wave reflects massive infrastructure transformation

Sime Darby’s $714 million loan request is part of a much larger investment surge across Southeast Asia, where over $50 billion is currently being deployed to build new data centers that will add 8.5 GW of power capacity1.

This represents an unprecedented infrastructure build-out, with upcoming capacity projected to be three times the current existing power capacity in the region1.

The scale becomes clearer when considering that analysts predict over $100 billion in total investments in emerging market data centers by 20302.

Malaysia specifically has positioned itself strategically in this boom, supported by the Multimedia Development Corporation and access to renewable energy from hydroelectric sources3.

The country’s appeal is evident in major commitments like Google’s $2 billion investment and Bridge Data Centres’ $2.8 billion facility, showing how hyperscale operators are betting heavily on the region’s digital transformation potential.

2️⃣ Speed and efficiency have become critical competitive advantages in data center development

The data center industry has evolved toward rapid deployment models, with leading operators like Bridge Data Centres achieving an average delivery time of just 8 months for new projects4.

This speed-to-market approach has become essential as demand from AI and cloud services creates urgent capacity needs that traditional construction timelines cannot meet.

The financing structures are also adapting, with Sime Darby’s proposed 5-year loan including a 2-year extension option, providing flexibility for both rapid deployment and potential market changes.

Operators are increasingly adopting modular designs and advanced technologies to future-proof facilities while reducing construction complexity and the risk of technical obsolescence5.

The emphasis on efficiency extends beyond construction speed to operational metrics, with best-in-class facilities targeting Power Usage Effectiveness rates of 1.2, which is 20% above industry average4.

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