In 2019, Singapore imposed a temporary moratorium on new data centre construction. Within months, hyperscalers that had been planning Singapore expansions began crossing the Causeway. KWM, whose lawyers have advised on data centre transactions across the region, describes what followed as a direct and sustained spillover: operators went over the border to Johor rather than wait out the moratorium. The redirection has not reversed.

White & Case estimated that Johor’s live supply averaged 145% annual growth from 2019 to 2024, and that the state is expected to account for 60% of Malaysia’s total capacity by 2030. Singapore rescinded the moratorium in January 2022 under a selective, sustainability-focused approval regime but investment flows into Johor had become self-sustaining long before that.

The arrival of generative AI – and the infrastructure buildout it demanded – accelerated them further. In 2024, data centre loan volumes in Asia increased close to 50% year-on-year to reach US$ 11 billion across 20 deals. By end-July 2025, US$ 15.2 billion had already been committed across 21 transactions, according to White & Case.

Johor’s role in that financing surge is anchored by a single landmark deal. When Yondr Group closed US$ 900 million in project financing for its 98MW campus in Johor’s Sedenak Tech Park in December 2024, the transaction introduced a structural feature that subsequent deal teams are now seeking to replicate: a special exemption granted by MDEC – the Malaysia Digital Economy Corporation – that allowed Yondr to bypass the standard Bank Negara Malaysia approval process for foreign currency borrowings.

Clifford Chance partner Thomas England, who led the transaction, described it as a benchmark for similar financings in the region. The Sedenak campus, once fully built out, is set to deliver more than 300MW of critical IT capacity, making it the largest hyperscale data centre campus in Southeast Asia.

The Johor–Singapore Special Economic Zone, formalised in January 2025, has reinforced the financing thesis. KWM describes the SEZ as providing dual-market access: the scale economics and land availability of Johor, combined with Singapore’s subsea cable infrastructure and enterprise demand base.

The SEZ extends preferential corporate tax rates, streamlines cross-border approvals, and strengthens power and connectivity integration between the two markets. For lenders underwriting deals in Johor, proximity to Singapore is now a credit consideration, not merely a geographic footnote.

The deal flow that followed Yondr confirms the model’s durability. In November 2025, Vantage Data Centers completed the acquisition of Yondr’s Johor campus as part of a US$ 1.6 billion equity investment into its APAC platform, led by GIC and ADIA. The transaction demonstrated that institutional capital – including sovereign wealth funds – is prepared to deploy at scale into assets built on the Johor financing template.

Malaysia secured US$ 23.3 billion from North American hyperscalers across the first ten months of 2024 alone, according to KWM. The financing structure that Clifford Chance and its co-counsel assembled for Yondr – non-recourse debt against a hyperscaler tenant, MDEC exemption enabling USD-denominated borrowing, IFC as anchor lender and de-risking institution – has become the reference point for every subsequent transaction in the market.