Which figures must be locked down first before investing in a Malaysian data centre?

Four: IT Capacity (total MW), Phase 1 (first-phase MW), Energisation (the year or quarter by which power must be live) and Budget (the acceptable investment ceiling per MW). Until these four are clear, land screening cannot really begin.

For a data centre project, should you secure the land or the power first?

This is a key decision investors must make early. For large Malaysian data centres, the usual approach is to complete TNB power, planning and water due diligence first, and then secure the land through a land option or a conditional SPA, so as to avoid completing on the land before the power connection is confirmed.

Malaysia data centre: key parameters

As demand from AI and cloud computing surges, Malaysia is becoming a hotspot for regional data centre investment, with Johor and the Klang Valley leading the way. But data centres are capital-intensive, long-cycle projects in which land, power and capital are tightly linked. What decides the outcome is often not which plot you choose, but whether the investor sets out the key parameters clearly from the start.

Before site selection begins, investors need to settle eight things first. These parameters directly determine the land area, the power connection conditions, the cooling solution and the overall investment model.

The 8 areas to confirm before investing

1. Investment model: Build and operate your own, colocation, build-to-suit, a joint venture (JV), or build and sell?
2. Target customers: Hyperscalers, cloud providers, AI/HPC or general enterprise customers? Is an anchor tenant already in place?
3. Project scale: How many MW of IT load? What are the first-phase and final capacities? And the land requirement that goes with them.
4. Location: Johor, Klang Valley, Negeri Sembilan and others. Are multiple candidate sites acceptable?
5. Power requirements: First-phase MW, final MW, the year power must be live, and whether phased supply is acceptable.
6. Technical standards: PUE target, rack density, Tier and redundancy level, cooling method, and the share of AI load.
7. Investment budget: Land budget, development CAPEX, investment ceiling per MW, and financing ratio.
8. Timeline and exit: Targets for land completion, construction start, energisation and COD, and the exit route: long-term hold, sale or REIT.

The four figures to lock down first

Of those 8 areas, four are preconditions for site selection to genuinely start. Until these four are clear, land screening cannot really begin:

① IT Capacity: How many MW in total?
② Phase 1: How many MW in the first phase?
③ Energisation: Which year and quarter must power be available?
④ Budget: What RM/MW or USD/MW is the investor prepared to accept?

Sample mandate: a data centre park in Johor; final IT load of 150MW; first phase 40MW; energisation required by Q1 2029; targeting hyperscale and AI customers; land of about 40–60 acres; target PUE ≤ 1.3; dual power feed required; low-water cooling preferred; a return on investment that meets the internal hurdle rate.

From mandate to investment model

With a mandate this clear, the development team can work backwards from it, turning commercial objectives into engineering and financial parameters:

150MW IT → facility MW/MVA → TNB connection conditions → land area → water demand → cooling solution → CAPEX → rent → EBITDA → IRR.

In the course of this the investor also has one very important decision to make: secure the land first, or the power? The power connection is often the most critical and the hardest variable to control for a large Malaysian data centre, and completing on land too early without securing power brings heavy holding costs.

The delivery sequence for a large data centre

For large Malaysian data centre projects we recommend proceeding in the following order, deferring irreversible spending, wherever possible, until the key conditions are confirmed:

① Investment mandate: Set out the investment mandate and the target parameters.
② Regional screening: Identify candidate regions on the basis of power, land and market.
③ Identify candidate land: Screen the plots that meet the requirements.
④ Three due diligence streams: TNB power DD + planning DD + water DD (power, planning and water resources).
⑤ Investment modelling: Complete the CAPEX, rent, EBITDA and IRR model.
⑥ Land option / conditional SPA: Secure the land first by option or on conditional terms.
⑦ Further confirmation of the power connection: Firm up TNB supply conditions and the timetable.
⑧ Final investment decision: Take the FID once the key conditions are met.
⑨ Complete the land acquisition: Formal completion, moving into the development phase.

How GXY can help

As advisers in corporate consulting and China–Malaysia cross-border investment, GXY helps investors clarify the investment mandate and set the order of site selection and delivery, and connects them on the ground in Malaysia with land, power (TNB), planning and the relevant government departments. Working alongside legal, engineering and survey teams on due diligence and investment modelling, we help make sure every key decision rests on clear data.

Explore our Corporate Consulting services → MIDA – Malaysian Investment Development Authority ↗

This content is for general reference only and does not constitute formal investment, legal or engineering advice. Data centre projects depend on power, land, financing and other conditions, so for your own case please book a consultation and the GXY advisory team will advise on your actual situation. Reviewed by the GXY advisory team. Last updated: 28 August 2026.