CEO Morning Brief

UEM Sunrise to Sell Johor Land for RM144.9m to Data Centre Company

Publish date: Wed, 12 Jun 2024, 10:46 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (June 11): State-owned property developer UEM Sunrise Bhd (KL:UEMS) said on Tuesday that it is selling land for RM144.9 million cash for the development of a data centre in Johor.

Located in Iskandar Puteri, the two parcels of freehold land measuring about 11.7 hectares (28.9 acres) will be developed for the construction of a data centre, which is "expected to feature cutting-edge technologies", UEM Sunrise said in a statement. The company did not disclose the buyer but identified it as “a leading global data centre industry player”.

The proposed disposal came on the heels of UEM Sunrise's memorandum of understanding with LOGOS Infrastructure Holdco Pte Ltd signed in May to develop a data centre campus in Gerbang Nusajaya.

UEM Sunrise chief executive officer Sufian Abdullah said the strategic land divestment reaffirms the company's dedication to supporting Johor's data centre ecosystem, ultimately addressing the global demand for data solutions.

“Our southern land banks, being strategically positioned next to Singapore, shall benefit from the growing investments in Iskandar Puteri, Johor, as well as spillover effects for demand on our residential and commercial spaces.

"As we reevaluate our remaining land bank potential, this divestment and monetisation strategy sets the groundwork for substantial technological, economic and community advancements in Johor,” he added.

UEM Sunrise is the latest in a series of property developers that are selling off their lands for the development of data centres in Johor. On Monday, Eco World Development Group Bhd (KL:ECOWLD) said it plans to sell a 123.14-acre industrial land in Iskandar Malaysia, Johor to Microsoft Payments (Malaysia) Sdn Bhd, a company providing data centre services, for RM402.3 million.

Microsoft Payment (Malaysia), a wholly owned subsidiary of Microsoft Ireland Operations Ltd, had also previously acquired four parcels of land measuring a total of 85.37 acres in Johor from Crescendo Corp Bhd (KL:CRESNDO) for RM447.64 million cash in November last year.

Last month, Paragon Globe Bhd (KL:PGLOBE) sold part of a parcel of freehold land it had just acquired in the district of Plentong, Johor Bahru, for RM238.32 million to Bridge Data Centres Malaysia IV Sdn Bhd, which is primarily involved in the business of leasing premises with computer facilities, and the provision of infrastructure services.

Besides that, it is also widely known that YTL Power International Bhd (KL: YTLPOWR) is collaborating with Nvidia Corp to build an AI infrastructure that will be powered by the US-based chip giant’s technology, with the first phase of the data centre expected to commence operations by the middle of this year.

The data centre, which will provide AI computing services to the country, will be owned and managed by YTL Power’s 60%-owned subsidiary YTL Communications Sdn Bhd and be hosted in YTL Power’s 500MW solar-powered Green Data Centre Park in Johor.

Other than in Johor, Sime Darby Property Bhd (KL:SIMEPROP) is set to build and lease out a hyperscale data centre at its Elmina Business Park in Shah Alam, Selangor in a deal worth RM2 billion, while Mah Sing Group Bhd (KL:MAHSING) announced a joint venture with Bridge Data Centres Malaysia V Sdn Bhd to develop a data centre in Bangi, Selangor.

Shares of UEM Sunrise were up three sen or 2.54% to close at RM1.21 on Tuesday, for a market capitalisation of RM6.12 billion.

Source: TheEdge - 12 Jun 2024

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