AREA acquires 30-acre land in Delapan, Kedah to build data centre

• AREA has also signed an option agreement with Northern Gateway to acquire another 126 acres in the same location for the second phase of ADCC two years later.

KUALA LUMPUR (Oct 10): Real estate advisory firm AREA Group of Companies, through its special purpose vehicle Data Gateway Sdn Bhd, signed a sale and purchase agreement with Northern Gateway Sdn Bhd to purchase 30 acres of industrial land in Delapan, Kedah, to develop the first phase of its hyperscale data centre campus called AREA Data Centre Campus (ADCC).

However, due to a non-disclosure agreement, AREA executive chairman Datuk Stewart Labrooy was not able to reveal how much the land was sold for, when contacted.

According to a press statement issued on Thursday, AREA has also signed an option agreement with Northern Gateway to acquire another 126 acres in the same location for the second phase of ADCC two years later.

The first phase of ADCC will have an estimated gross development value (GDV) of US$2.4 billion, and the entire 156 acres, upon completion, will have an estimated GDV of US$15 billion.

The 156 acres is located within the 4,400-acre Delapan Special Border Economic Zone, where Northern Gateway is the master developer. It features a free commercial and industrial zone, and is located at the northern end of the North-South Expressway and Malaysia Federal Route 1, where the 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 DCs. 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 Labrooy in the press statement.

The site is currently powered by a 132 kilovolt (KV) power substation located at Bukit Kayu Hitam, which is three kilometres away. A second 132KV Transmission Main Intake (PMU) is being built by Tenaga Nasional Bhd (TNB), with plans for a 275KV PMU to be built soon after. Both PMU’s are within the Delapan site, according to a press statement.

Furthermore, the site has ample water supply, with more than 65 million litres a day, to cater to the needs of the data centres.

Northern Gateway senior director Datuk Paduka Ammar Shaikh Mahmood Naim said in the statement, “Delapan is uniquely positioned to emerge as a prime destination for core plus and investment-grade assets. Northern Gateway 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”.

The statement also highlighted that there are development plans for Delapan to commission a solar farm, where the ADCC will be able to offer green energy to its clients to achieve their net zero carbon targets. Moreover, the ADCC site is considered ideal for building a hyperscale data centre hub, as it is away from airport and railway hubs, but is still well connected to such hubs via the existing highway networks.

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