KUALA LUMPUR: AREA Real Estate Advisory Sdn Bhd (AREA), a regional-based private equity and advisory firm, is acquiring a 150-acre freehold industrial land within the Delapan Special Border Economic Zone (Delapan SBEZ) situated in Bukit Kayu Hitam, Kedah.
AREA signed a heads of agreement (HoA) with Northern Gateway Sdn Bhd, the master developer of the Delapan SBEZ, to develop data centres.
AREA chairman Datuk Stewart LaBrooy said that following the signing of the HoA, the company could start promoting and developing new generation data centres at Delapan SBEZ, which has ample access to sufficient and scalable utilities required for energy, water and network capacity.
"The development will also adopt green sustainability initiatives to reduce the carbon footprint of the data centre park, with the first phase of development slated to commence in Q4 2023," he said in a statement.
"The development aims to be a catalyst for high-value job creation among the clients of cloud services and storage, as well as encourage manufacturers of data centre equipment and servers to localise production, which will, in turn, create more jobs and grow the local economy", he added.
The data centres established within the park will be benchmarked to Uptime Institute's Tier III and Tier IV certification standards.
Uptime Institute is the global standard bearer for digital infrastructure performance.
Their tier standards have been used in the design, construction, and operations of thousands of sites in more than 110 countries.
The 4,400-acre Delapan SBEZ features a free commercial and industrial zone and is strategically located at the northern end of the North–South Expressway at the border crossing to Thailand.
The North–South Expressway is connected to Thailand's Route 4 or Phetkasem Road, which goes all the way to Bangkok.
It also has access to the Bukit Kayu Hitam Inland Port.
More importantly, it lies at the convergence of international telco connectivity, with prominent players from Thailand and Malaysia establishing their presence here.
The importance of this location has been further enhanced by data published in 2019, which showed that Bukit Kayu Hitam recorded more than 6 Tbps (terabits per second) of international internet bandwidth of traffic directing to Kuala Lumpur and Singapore from Indochina, transiting along the North-South Expressway route.
According to a recent CBRE report, data centres are in demand in emerging Southeast Asian markets as the region has large populations of internet users, stable economic growth, and government support for industry 4.0 and 5G development.
As of the end of 2021, total data centre capacity in Southeast Asia stood at 1,100MW, with Singapore taking in half the volume and Indonesia and Malaysia leading the emerging markets.
Hyperscale data centre players from China, like Alibaba and Tencent, have been the early movers in the region. However, American companies are now catching up with Microsoft in 2021, which commenced work on its first data centre in Malaysia.
The report also mentioned that the demand for data centres remained diversified and is driven primarily by multinational companies (MNCs) in the financial, telecommunications and information and technology (IT) sectors.