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PETALING JAYA (April 30): A 253-acre freehold landbank in Alor Gajah, Melaka — bought for RM45.60 million in 2023 to develop mixed residential and commercial properties — is now the centrepiece of an indicative US$1.1 billion (RM4.36 billion) Artificial General Intelligence (AGI) data centre development, after DPS Resources Bhd's wholly-owned subsidiary signed a memorandum of understanding (MoU) with an Alibaba Group-affiliated technology firm.
DPS said its subsidiary DPS Energy Sdn Bhd (DPSE) had entered into the MoU on April 28 with Hangzhou Xinfengwei Network Technology Co Ltd (Xinfengwei) — an associate company of Dingding (China) Information Technology Co Ltd, an affiliate entity within Alibaba Group Holding Ltd — to explore the development of AGI data centre infrastructure projects in Melaka, according to the company's announcement on Bursa Malaysia. A separate press statement was also issued.
From RM4 psf to a data centre play
DPS acquired the seven adjoining freehold parcels in Mukim Lendu, Alor Gajah at an average price of approximately RM180,000 per acre — or roughly RM4.13 per sq ft — at a time when the land was intended for a mixed development comprising shoplots, affordable homes, terraced houses, semi-detached units and apartments with an estimated gross development value of RM750 million.
Three years on, the same landbank is now being positioned for data centre infrastructure, a use that commands industrial land premiums of RM35 to RM50 per sq ft in Melaka — a quantum leap from the original acquisition price.
Under the terms of the MoU, DPSE will retain full ownership of the land and infrastructure assets throughout the collaboration, making it a classic landlord play, the filing showed.
DPSE will provide the land, power supply and infrastructure for the project sites, handle all regulatory approvals, government liaison and compliance requirements in Malaysia, and oversee overall project management.
Xinfengwei, for its part, will introduce global computing service demand and potential customers, be responsible for market development, technical operations and day-to-day business management, and operate independently in compliance with applicable laws — retaining exclusive computing power income, according to the announcement.
Melaka's case as a third digital hub
The project signals Melaka's growing ambitions as an alternative to the increasingly congested data centre corridors of Sedenak in Johor and Cyberjaya in Selangor.
Strategically positioned between the two established hubs, Melaka offers the prospect of available land, lower entry costs and proximity to national power grids and infrastructure.
The first phase of the project targets a capacity of 150MW to 180MW, with an estimated development cost of US$7.5 million per MW.
Based on 150MW, this yields an indicative project value of approximately US$1.1 billion (RM4.36 billion), subject to final confirmation and definitive agreements, the filing showed.
Alibaba link adds strategic weight
The involvement of an Alibaba-affiliated entity lends significant brand credibility to DPS's Melaka landbank, with the potential to attract hyperscalers, global technology players and anchor off-takers for the development.
DPS said the MoU is expected to enhance the value of its landbank, strengthen its data centre development pipeline, and position the group for long-term recurring income generation.
DPS group chairman and founder Tan Sri Dr Sow Chin Chuan said the MoU provides "a meaningful foundation for both parties to evaluate commercial structures, technical requirements, and potential off-take arrangements", while cautioning that the agreement remains non-binding at this stage.
"Our immediate focus is to advance discussions towards definitive agreements in a disciplined manner, ensuring that any future development is supported by sound commercial terms, regulatory compliance, and long-term value creation for DPS and its shareholders," he said in the press statement.
The MoU carries several important caveats. It is non-exclusive and entered on a first-come, first-served basis, remains valid for one year from the date of execution and may be extended by mutual consent, and either party may terminate it with 30 days' written notice without liability, according to the filing.
The agreement is non-binding save for its confidentiality provisions.
DPS said the MoU is not expected to have any immediate material effect on the group's earnings, net assets, gearing or issued share capital for the financial year ending March 31, 2027.
However, successful implementation of the proposed collaboration may contribute positively to future earnings, the filing noted.
No shareholders' or regulatory approval is required for the MoU as it is entered into in the ordinary course of business.
Editor’s note: Bursa Malaysia announcement and press statement by DPS Resources Bhd dated April 29. This article is for informational purposes only and does not constitute financial or investment advice.
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