News Release
For Immediate Release
- Signs Sales & Purchase Agreement with Northern Gateway S/B, announcing the first phase of development of the AREA DC Campus with the purchase of a 30-acre parcel of industrial land of GDV USD 2.4
- Signs an Option Agreement to acquire the balance 126-acre parcel for the second phase of the development.
10 October 2024, Kuala Lumpur – The AREA Group (AREA) through its SPV; Data Gateway S/B signed an SPA today with Northern Gateway S/B (NGX) initiating the first phase of the development of a hyperscale Data Centre Campus, the AREA Data Centre Campus (ADCC) at Delapan in Kedah.
The SPA is for an initial acquisition of a 30-acre parcel of the 156-acre campus to enable AREA to launch its first phase.
With a GDV estimated at USD15 billion upon completion, the 156-acre site enjoys freehold status as it is located within the 4,400-acre Delapan Special Border Economic Zone (Delapan).
The Delapan features a Free Commercial and Industrial Zone and is strategically located at the northern end of the North–South Expressway and Malaysia Federal Route 1, where the major border crossing to Thailand is located.
“We have begun the first phase of the development with the acquisition of the 30-acre site where the first Data Centre (DC) 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 DC’s. 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 (IX) which will be completed in 2025, said Dato’ Stewart Labrooy, Executive Chairman of the AREA Group of Companies.
“We also like Delapan as it is free-hold, flood-free and platform-ready. ADCC will provide clients with full utility and infrastructure tap-in points, park maintenance and 24-hour security”.
He further added that AREA will be able to facilitate dual-feed power supply from TNB, water supply and utility supplies, including sanitation. Access to Green-RE power is available which will help contribute towards carbon off-set credits and features built in Right of Way (ROW) for utilities including Telco and dark fibre networks.
AREA will undertake Build-to-Suit projects for long-term lease or sale depending on client requests.
With regards to the physical site and infrastructure readiness, the site is currently energised by a 132KV power substation located at Bukit Kayu Hitam, three km away whilst a second 132KV Transmission Main Intake (PMU) is being built by TNB, with a third 275KV PMU earmarked to be built thereafter, both within the Delapan site.
Delapan boasts a robust Internet Network Ecosystem with access to both the Satun- Songkhla Cable Landing Stations (CLS) in southern Thailand and the northern CLS in Penang, Malaysia. Additionally, an Internet Exchange (IX), which is crucial for DC network connectivity is under construction and will be operational in Q2 2025. The combination of 12 CLS’s, numerous telco Points of Presence (POPs) and an the upcoming IX allows for excellent network availability and diversity with high network density and low network latency.
“Delapan is uniquely positioned to emerge as a prime destination for core plus and investment-grade assets. NGX is proud to host AREA and their partners for its inaugural development of the Data Centre Campus and remains committed to attracting high-value, institutional-quality projects, said Dato’ Paduka Ammar Shaikh Mahmood Naim, Senior Director of Northern Gateway.
“In 2023, ASEAN attracted record foreign direct investment (FDI) inflows totaling USD
226.3 billion, marking its third consecutive year of growth, despite a 2% decline in global FDI. This demonstrates the region’s robust economic prospects and its deep integration into global value chains. Delapan stands out in this context, offering significant advantages in connectivity and infrastructure, which are critical for investment-grade developments.”
Dato’ Paduka Ammar further added that NGX is dedicated to nurturing Delapan’s ecosystem through ongoing infrastructure enhancements and tailored incentives, positioning it as a top-tier location for investors seeking secure, scalable opportunities. And that their focus is on attracting projects that not only deliver strong returns but also contribute to the sustainable growth of the region’s industrial landscape.
Development plans for Delapan will include the commissioning of a solar farm where the ADCC will be able to offer generated green energy to its clients, enabling them to comply with their Net Zero carbon targets. In terms of location and accessibility, the ADCC is considered ideal for the building of a hyperscale DC hub in view of its safe distance away from airports and railway hubs but remains well connected to air, road, and rail transportation hubs via the existing highway networks.
A commissioned feasibility study on the freehold 156-acre site at the Delapan East Zone 1 confirmed the viability of the site as having an ecosystem that can support hyperscale DC development and operations. The study covered physical site-selection suitability and infrastructure readiness, including legal and technical due diligence, location, and accessibility.
The site has ample water supply (more than 65 million litres per day) to cater to the needs of the DCs.
The fibre and network connectivity at the ADCC has competitive advantage as a regional interconnect point from West (India, Middle East, and Europe), East (Hong Kong, Japan, and Taiwan) as well as North (China) to South (SE Asia and Australia).
The study concluded that above key infrastructure readiness coupled with customised government incentives including tax exemption, access to Green Energy, land that is flood- free and freehold, makes ADCC ideal for DC operators to set up their businesses and operations.
AREA Real Estate Advisory Sdn Bhd had signed in January 2023, “Heads of Agreement” (HOA) with Northern Gateway Sdn Bhd, the Master Developer of the Delapan. The HOA allowed AREA to acquire and develop a 156-acre freehold industrial zone parcelled within the Delapan exclusively for DCs.
According to a recent report published by Cushman & Wakefield on Malaysian DC landscape; hyperscale DCs requiring high power capacity (greater than 50MW) and advanced cooling systems, the cost per megawatt in Malaysia has surpassed USD 10 million. Using 50MW as a benchmark, the total cost for constructing a 50MW data centre would be approximately USD 500 million. This figure includes essential components such as electrical systems, cooling/HVAC systems, and building shell and fit-out. The report concluded that it was important to note that the property prices can vary significantly depending on the location and is an additional consideration and not typically included in the USD 10 million per megawatt estimate.
Issued On Behalf of: AREA Real Estate Advisory Sdn Bhd
By: Public Relations Consultant, DK Hansra (+60123981365)
For Further Information: Executive Chairman, Dato’ Stewart LaBrooy (+60122003515)
AREA Group of Companies (+603 55909883)
AREA Website: www.area.sg
For Further Information: Amy Fadzlan
Northern Gateway Group of Companies (NGX) Tel: +603-8322 5222
Email: amy@ng-x.my