Johor

Johor is Malaysia's southernmost state, bordering Singapore across the Causeway and long marketed as a low-cost alternative for operators priced or capacity-locked out of Singapore. Cheap land and power, plus access to Singapore's fibre network, drew heavy data-centre investment into the Iskandar Malaysia zone as part of a national push that has attracted over 50 billion ringgit in pledges since 2024.

That growth outran Johor's water infrastructure. On 27 April 2026 the state halted Tier 1 and Tier 2 data-centre approvals after the country's first water-rights protest at a data-centre site, telling applicants to wait for new water connections until mid-2027 . Given typical construction timelines, that floor means no new Johor capacity is likely to commission before late 2028. By late June, Johor had itself rejected around 30% of applications on water and electricity grounds, a tighter administrative filter running alongside the outright freeze .

Johor's own halt is now one of two competing state responses to the same investment wave. ZDATA's July defence of its water use was the first operator statement since the freeze, while neighbouring Selangor chose a local-content test rather than Johor's water threshold, so applicants now face different admission rules depending on which state they approach .