Johor Bahru and Thailand are two of the busiest data centre build-out markets in Southeast Asia. They share the same problem. The projects are large, power and water approvals are scarce, and bank lending has limits. S&P Global Ratings has said that Malaysian data centre and GPU funding needs are expected to exceed domestic bank lending limits within three years. That gap is where private credit is starting to appear.
This article explains how projects in both markets are financed, the four business models lenders keep seeing, and where a bridging or private credit lender can add value.
Why Johor and Thailand
Johor sits next to Singapore, which is tightening its own data center growth. Capacity and demand have followed the overflow north across the Causeway, and Johor is now widely described as the region's largest data centre hub.
Thailand has taken a different route. Its Board of Investment (BOI) has approved large incentive packages, reportedly around US$27 billion across three data centre projects in May 2026, including a 200MW project by Skyline (part of UAE-based DAMAC) and a 134MW project by Bridge Data Centres.
In both places the scarce asset is no longer land. It is secured power, secured water and the permits that go with them.
Four business models, four different financing needs
- Land and power bank. A developer secures a site, a power allocation and the approvals, then sells or leases to an operator. Lenders look at the power rights and permits more than the dirt. This stage often sits too early for banks, which makes it a natural fit for bridging finance.
- Build-to-suit wholesale colocation. The developer builds the shell, power and cooling against a pre-lease from a hyperscaler or large tenant. It is financed like infrastructure: a construction loan, then a refinancing once the asset is stabilised. The tenant's credit and the lease term drive pricing.
- Neocloud (GPU-as-a-service). The CoreWeave model. The operator rents space in someone else's data center and borrows to buy GPUs. Debt is typically raised in special purpose vehicles that pledge the GPUs and the customer contracts. In practice the debt is backed by the credit of the customers, with the hardware as a recovery floor. Two recent CoreWeave facilities show the difference: one secured on a single investment-grade customer contract was rated A3, while one secured on two non-investment-grade customers was rated Ba2.
- Later phases of a campus. Phase one proves the model. Later phases can need more capital than the first lender group wants to provide, or may arrive before the bank has been approached.
Johor: power and water are the gates
To build in Johor, a project needs an Electricity Supply Agreement with Tenaga Nasional (TNB), and demand is now coordinated through a federal Data Centre Task Force. Reports in mid-2026 put signed agreements at roughly 8.35GW, with a further 4.6GW approved and pending execution. A signed agreement is the best single proof of a project's value.
Water is the second gate. Johor has asked investors to postpone water-cooled expansion projects, and authorities have said they will assess applications on water, electricity and the sponsor's financial strength. That last criterion matters for anyone seeking credit.
The cost advantage is also narrowing. The average base electricity tariff rose about 14 percent from July 2025.
Thailand: incentives, plus new rules
Thailand's pitch is generous BOI incentives and a large power system with diverse sources, including imported hydropower from Laos. Water is a growing concern, and large operators now have to submit water-management plans. The BOI has also set up a subcommittee to screen proposals on resource use, environmental impact and clean energy sourcing, and a new tariff category means data centres bear more of the incremental power cost.
Smaller GPU-focused deals are also appearing. In July 2026 the BOI approved about US$235 million of GPU server infrastructure by one operator, the kind of project where private credit is relevant.
Where bank financing stops
A May 2026 note from law firm Drew & Napier observed that the Southeast Asian projects it reviewed were predominantly bank-led. Its example in Johor was a financing of over US$900 million from five international banks. The same note said operators are exploring private credit facilities, and that later phases of campuses may need them.
That is consistent with what we see. Private credit does not replace the bank on a pre-leased, investment-grade project. It steps in where banks are full, slow or not yet engaged:
- Bridging against powered land or a project company's shares while permits and a pre-lease are finalised
- Stretch or mezzanine capital behind a bank facility when the sponsor wants a higher loan-to-cost
- Funding for tenants or structures that fewer banks will touch
- Later campus phases once phase one has proven demand
- A bridge to the bank facility after a pre-lease is signed but before the loan closes
What lenders ask sponsors
If you are raising capital for a data center in Thailand or Johor, expect these questions:
- Is power secured? Lenders want the signed agreement, the megawatts and the energisation date.
- Is water secured, and what is the cooling design?
- Who is the offtaker, what is their credit, and is the contract take-or-pay? What is the tenor?
- For GPU deals: which chips, which supplier, how does contract tenor compare to loan tenor, and who holds the pledge over the SPV?
- What equity is the sponsor putting in, and what is their track record?
- What is the exit: refinancing a stabilised asset, or a sale of powered land?
- Sponsors who answer these in writing, with documents, get to a term sheet far faster.
How GMG Capital Advisory fits
GMG Capital Advisory is the bridging loan, private credit and special situations arm of Global Mortgage Group, a Singapore-headquartered real estate finance platform.
We focus on Asia-Pacific middle-market situations of US$20 million and above, with no upper limit, and we work through a network of capital providers.
In data centers, the sweet spot is the stage before bank financing is in place or the gap between what a bank will lend and what the sponsor needs.
We are most useful to sponsors who already have the fundamentals in hand: land or power rights, a credible team and a clear exit.
Frequently asked questions
Q1: Can private credit finance a data center in Johor or Thailand?
Yes, in specific roles. Banks lead on senior debt for pre-leased projects, but private credit can provide bridging, stretch senior or mezzanine capital, particularly where banks have reached their limits or approvals are still in progress.
Q2: What is a neocloud and how is it financed?
A neocloud rents out GPU computing capacity. It is usually financed with debt secured on the GPUs and the customer contracts, held in a special purpose vehicle. The credit quality of the customers largely sets the price.
Q3: What is the minimum loan size at GMG Capital Advisory?
US$20 million, with no upper limit.
Q4: Does GMG finance data centers directly?
GMG Capital Advisory works with capital providers on bridging and private credit solutions. Each deal is assessed on its own merits.
Talk to us
If you are sponsoring a data centre in Thailand, Johor or elsewhere in Southeast Asia and need to discuss financing, send us a short summary of the project.
Donald Klip
Head, GMG Capital Advisory
[email protected]
WhatsApp: +65 9773-0273
Book a Call: https://calendly.com/gmgdonald/15min
This article is for general information only and is not financial, legal or investment advice. Regulations and incentives in both countries are changing quickly and should be confirmed with local counsel.
