This article first appeared in City & Country, The Edge Malaysia Weekly on February 23, 2026 - March 1, 2026

The digital world has become part of our everyday life and data centres are key in managing the huge amounts of data and information. We turn to JLL Malaysia’s capital markets data centres team lead Sum Chun Kit to learn more about them and what they do.

“Data centres are large, purpose-built facilities that house thousands of computer servers and are specifically designed to provide the computing power and data storage that keep online services running smoothly for millions of users,” Sum explains.

“These facilities are the backbone behind every digital service we rely on. When you watch your favourite drama on Netflix, chat with friends on WhatsApp, check your bank balance, order food through Grab, or buy something from Shopee, you’re connecting to servers housed in data centres around the world. Without data centres, most of the digital services we take for granted would be impossible.”

There are different types of data centres and each has a different role to play. Sum explains that data centres typically fall into three main types: Enterprise Colocation, Hyperscale and Edge.

“Enterprise Colocation operates like a flexible business centre where companies rent exactly the computing space they need. A small fintech start-up might lease just one server rack, while an established bank could secure a private area with dozens of racks, and a large corporation might lease an entire section of the facility,” Sum explains, adding that this offers flexibility and cost efficiency.

“Hyperscale serves tech giants requiring massive computing power to support global operations. Rather than sharing facilities with multiple tenants, entire buildings or campuses are dedicated to just one or two major companies,” he says, highlighting how a lot of electricity is consumed to operate this type of data centre.

“Edge data centres are smaller facilities strategically positioned close to end users to bring computing power nearer to where it’s needed, minimising the distance data must travel. These facilities are deployed across all types of locations, from major metropolitan areas and suburbs to remote and underserved regions, with the primary goal of reducing latency (delay in data transfer) for applications that require near-instantaneous responses.”

In Malaysia, the industrial property sector is booming, thanks to the demand for data centres. This bodes well for the country as Malaysia moves to become a high-income nation.

“Data centres are essential for modern digital economies. They create high-value, skilled jobs in areas like engineering, cloud services and cybersecurity, supporting Malaysia’s transition toward a knowledge-based economy. Clusters in Johor and the Klang Valley attract billions in foreign investment and stimulate local supply chains ranging from construction and maintenance to Information and Communications Technology (ICT) services, which involves the management, development and support of digital technology systems,” says Sum.

He adds that data centres expand local tax bases, fund community infrastructure such as better roads and utilities, as well as drive employment well beyond their sites. Each data centre job can create several more in surrounding industries due to the ecosystem of suppliers and service providers they attract.

Additionally, with the increased use of artificial intelligence (AI), demand for data centres have increased. “AI has become a powerful tool that makes daily operations more efficient across virtually every sector of the economy. It transforms how we deliver government services by automating citizen requests, processing applications faster and providing 24/7 support through intelligent chatbots. In utilities management, AI optimises energy distribution, predicts maintenance needs and reduces waste by analysing consumption patterns in real-time,” he says.

The finance sector, Sum says, relies heavily on AI for fraud detection, automated trading, risk assessment and personalised banking services, while for healthcare systems, AI is used to analyse medical images, assist in making diagnoses and manage patient records more efficiently.

Elsewhere, the manufacturing industry deploys AI for predictive maintenance, quality control and supply chain optimisation. Meanwhile, transportation and logistics benefit from AI-powered route optimisation, autonomous vehicle systems and smart traffic management.

“In retail and e-commerce, AI is used for inventory management, personalised recommendations and demand forecasting. Even in agriculture now, AI is used for crop monitoring, precision farming and yield prediction,” says Sum.

He adds that all these AI applications require massive data-processing capabilities that can analyse information far beyond what the human brain can handle, make split-second decisions based on real-time data and continuously learn from patterns in big datasets. Without strong data centre infrastructure to support these systems, Malaysia would struggle to compete in the modern digital economy.

While these benefits bring economic growth to the country, data centres have some drawbacks.

Sum explains, “These facilities require enormous upfront investment and dependable access to land, water and energy. If not managed sustainably, high operating costs and resource competition could strain local systems. Reliance on large multinational suppliers or operators could also create an uneven economic landscape, with local businesses needing more support to benefit fully from sector growth.”

To mitigate this, he says operators are being intentional in how they set up data centres. “Data centre operators are adopting energyefficient cooling technologies, tapping renewable power sources, and using alternative water systems to lessen their environmental footprint and reduce reliance on potable water. Operators and developers often collaborate with utility providers and local authorities to ensure managed distribution of resources for data centre operations and surrounding communities.”

Another significant challenge to the growth of data centres is that all data must ultimately be managed by humans, who can make errors in handling, securing or interpreting information.

“As more of our personal and business data moves online and gets stored in these facilities, it creates new vulnerabilities for data breaches, cyberattacks and unauthorised access to sensitive information,” he says.

To address this, operators are taking a hybrid approach. “Data centre operators use automation, encryption and compliance with ISO27001 and Malaysia’s PDPA (Personal Data Protection Act) to ensure secure processes. At the same time, they also invest in human safeguards such as continuous training and critical analysis workshops. These programs teach staff to think critically about AIgenerated insights, ensuring that both technology and human judgement work together to keep information secure and reliable,” says Sum.

To date, Johor has the highest concentration of data centres in Malaysia as it has ample land availability, reliable power supply, attractive government incentives and proximity to Singapore, making it an ideal location for large-scale facilities.

“Johor is dominated by hyperscale facilities with many projects built to handle capacities of 100MW or more. The Johor-Singapore Special Economic Zone further cements its position as a leading global hub for Asia-Pacific digital infrastructure and AI-driven operations,” Sum shares.

Meanwhile, Klang Valley holds the second-largest share of capacity. Sum says the region is home to a mix of cloud, enterprise and colocation data centres, serving diverse business needs. In recent years, a number of hyperscale projects have emerged.

Sum observes three major trends in Malaysia’s data centre expansion phase.

Overall, Sum believes that this growth will give Malaysia several long-term advantages, such as creating more high-value, knowledge-based jobs; attracting sustained foreign investment; strengthening local industries such as construction, ICT and renewable energy; as well as enhancing national competitiveness in the digital economy.

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