Khazanah’s Arm to Tap Vast Landbank to Power Data Centers
(Bloomberg) -- Malaysian sovereign wealth fund Khazanah Nasional Bhd.’s infrastructure arm UEM Group Bhd. plans to use its vast land holdings to supply clean energy and industrial land to accommodate power-hungry data centers in the southern state of Johor, said Managing Director Amran Hafiz Affifudin.
Johor, where a new special economic zone is being jointly developed with neighboring city-state Singapore, garnered 164.45 billion ringgit ($40 billion) in data center investments as of the second quarter. The state is expected to host 60% of the Malaysia’s data centers by 2030.
That bodes well for UEM, whose property development subsidiary UEM Sunrise Bhd. is one of the biggest landowners there, with close to 4,600 acres. Sunrise is currently firming up plans for the 40-acre renewable energy-powered Gerbang Nusajaya Industrial Park in the state, Amran said during an interview in Kuala Lumpur on Tuesday.
Its green energy unit UEM Lestra Bhd. is also set to begin construction on a 1-gigawatt hybrid solar plant backed by investors including units of I Squared Capital Advisors and Macquarie Group. The first phase of the plant, encompassing 500 megawatts, is to be built at a cost of 2.5 billion ringgit, Lestra said earlier this year.
UEM is exploring investing in water treatment for industrial parks as well, which is crucial for data centers’ cooling needs. “This goes hand-in-hand with supplying energy to industrial parks,” Amran said. “Even if you don’t include data centers, there is a huge need for water and power just for industrial needs.”
Malaysia is one of the three leading growth markets in Asia and the region’s data center build-out will materially lift power demand through 2028, according to BMI, a Fitch Solutions company, in an industry outlook report on Wednesday.
Still, the pace of expansion is placing significant pressure on the country’s land and power resources, including the grid. “Meeting this new demand with clean power becomes even more challenging, but increasingly important as renewable-matching commitments become central to data centre operators’ business models,” BMI said.
Green Pivot
The Malaysian conglomerate, which has primarily been linked to property and road infrastructure development, is now also focusing on green energy and sustainability endeavors for future growth.
Last year Lestra purchased a majority stake in Malaysia’s only independent power utility firm Nur Power for an undisclosed sum and committed 1.5 billion ringgit to decarbonize industrial parks across the country through 2026.
Lestra is now adding solar renewable power mix on top of Nur’s 350 MW gas facility to Kulim Hi-Tech Park in Malaysia’s northern Kedah state, where semiconductor and electronics components companies such as Infineon Technologies AG and AT&S have operations.
“We can repower the plant for up to 1 gigawatt in capacity if the regulators allow it,” Amran said, adding the company would be keen to sell low-carbon gas power to other industrial areas as well through Malaysia’s national grid. The company also owns Cenergi, which operates biogas plants in Malaysia and Indonesia.
He expects the group to do “better on the profit side” in 2025, supported by higher contributions from Sunrise and other units, and is optimistic about 2026 based on the group’s current deal pipeline.
UEM posted a 923 million ringgit pretax profit last year, rising by almost three times from the previous year, according to data from the company. Its debt-to-equity ratio was just below 40%, giving it “a lot of headroom for growth in terms of our balance sheet,” Amran added.
It currently has two publicly listed units, Sunrise and its asset and facility management division UEM Edgenta Bhd., and is looking to list other subsidiaries “when the time is right,” Amran said.
Sunrise climbed as much as 2.5% on Thursday, the most in a month, trimming its year-to-date losses to 44.4%.
(Updates with details on renewable power mix in the 10th pragraph and share moves in the final paragraph. A previous version of the story was corrected to say Lestra provides gas power to Kulim Hi-Tech Park in the 10th paragraph.)
©2025 Bloomberg L.P.
