Real estate private equity firm Area Group has begun constructing its 156-acre data center campus in Kedah, northern Malaysia.
The firm first signed a heads of agreement (HOA) with Northern Gateway Sdn Bhd, the primary developer of the Delapan Special Border Economic Zone, in January 2023.
Area Group has now officially purchased the land in a sale and purchase agreement for an undisclosed amount, and begun construction on the first 30-acre parcel of land.
The second 126-acre parcel will commence construction in two years. Upon completion, the 156-acre campus will be valued at $15 billion.
The site is currently powered by a 132kV substation located around three kilometers away. A second transmission main intake is being built at the moment, with a third set to be built soon after.
“We have begun the first phase of the development with the acquisition of the 30-acre site, where the first data center will be completed by the end of 2025. We selected the site for its accessibility to ample power and water supply, two resources that are critical for the development of successful data centers. In addition, the area has ample subsea cable connectivity that is currently landing in Satun and Songkhla, just across the Thai border, and is connected to our site via an Internet exchange, which will be completed in 2025,” said Datuk Stewart Labrooy, executive chairman at Area.
Northern Gateway senior director Datuk Paduka Ammar Shaikh Mahmood Naim added: “Delapan is uniquely positioned to emerge as a prime destination for core plus and investment-grade assets. Northern Gateway is proud to host Area and their partners for its inaugural development of the data center campus, and remains committed to attracting high-value, institutional-quality projects.”
Area has been providing real estate solutions since 2012, including logistics and industrial parks across Malaysia. This transaction marks its first data center project.
Delapan is located in the north of the country, on the border of Thailand. The 4,400-acre Delapan Special Border Economic Zone (previously known as the Kota Perdana SBEZ) is a high-tech park at Bukit Kayu Hitam, the border town between Thailand and Malaysia in the state of Perlis. Northern Gateway has been developing the area since 2018 with the aim of making the region Malaysia’s second-best data exchange hub, behind Johor.
Data centers in Malaysia have historically been concentrated in Johor, with operators such as PDG, AirTrunk, Equinix, Keppel, ChinData's Bridge DC, and Yondr having a presence in the region.
