Malaysian construction firm Gamuda Berhad has acquired a land in Port Dickson of Malaysia for MYR 424.4 million ($95.09 million) to develop cloud or data center infrastructure.
The firm said in a bourse filing on Monday that its wholly owned indirect subsidiary Gamuda DC Infrastructure Sdn Bhd had entered into a sale and purchase agreement with West Synergy Sdn Bhd to purchase the 389 acres freehold land.
The plot is located within Springhill Industrial Park in Negeri Sembilan and forms part of the Malaysian Vision Valley 2.0 development corridor.
Gamuda is acquiring the land for its high-tech digital infrastructure hub.
West Synergy is a 60:40 JV between subsidiaries of MUI Properties Bhd and Chin Teck Plantations Bhd.
The land plots acquisition will be funded by Gamuda internally generated funds.
Barring unforeseen circumstances, the acquisition is expected to be completed by the end of July 2025.
MIDF Research said in a note on Tuesday that it viewed that this transaction is in line with Gamuda’s latest strategy of a differentiated data center delivery whereby Gamuda provides an integrated offering of “Bundled Land + Water + Power (RE)” that is able to offer better speed to market, coupled with its digital industrial building system (IBS) capabilities.
“Based on the land size of 389.7 acres, we estimate that it could cater for about 500MW to 600MW of data center developments, which may translate to a construction size of MYR 15 billion ($3.36 billion) to MYR 18 billion ($4.03 billion).
According to MIDF, the management is optimistic on the pipeline of data center projects and has been expanding its capacities to cater for the stronger demand.
It is noted that Gamuda has recently expanded both its digital IBS facilities, and the group now has eight data center teams ready for up to eight simultaneous data center construction.
Meanwhile, Hong Leong Investment Bank Research said in a note on Tuesday that this deal will enable Gamuda to execute its integrated partnership model for data centers offering bundled land plus water plus power.
According to the research house, this land acquisition will enable Gamuda to execute its integrated partnership model for data centers.
This model will leverage on existing relationship(s) with hyperscale client(s) comprising a bundled offering involving land plus water plus renewable energy power (enabling green data centers).
“We believe this strategy is unlikely to be replicated by other competitors given: requires big balance sheet, track record in water infrastructure, and renewable energy capabilities,
“If all goes to plan, we believe Gamuda will be able to offload data center development ready land parcels at a higher price while securing data center construction contracts potentially at higher margins,” it said.
Hong Leong preliminarily estimate a huge potential data center powerbank of 700MW-1GW unlocking a sizable long term data center construction pipeline.
Assuming a conservative construction costs of MYR 20 million ($4.48 million)/MW, it opined that potential high certainty long term data center contracts could amount to about MYR 14 billion ($3.14 billion) to MYR 20 billion ($4.48 billion) (versus its current orderbook of MYR 31.8 billion ($7.13 billion).
“Nevertheless, we believe there’s room to tweak our numbers depending on plans for water and power infra. On the whole, we expect the development to take place over multiple phases given the potential scale,” it said.
It is noted that Gamuda is currently able to deliver eight concurrent data center builds post expansion of its digital IBS facilities and data center teams.
Hong Leong expects this to lead to a sizable long term stream of high margin data center construction contracts for the firm and should not stress its balance sheet.
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