August 18, 2026 | 09:25 pm
TEMPO.CO, Jakarta - Jones Lang LaSalle (JLL) Indonesia stated that data center projects are now the second-largest contributor to industrial land demand. "Aside from manufacturing, the primary contributors are clearly those related to copper and mining, but the second-largest source of demand comes from 'other services'—specifically data centers," said Farazia Basarah, Country Head and Head of Logistics & Industrial at JLL Indonesia, during a media briefing in Jakarta on Tuesday, August 18, 2026.
Farazia recounted that, about seven years ago, the data center project was initially centered in Singapore. However, the Singaporean government imposed a moratorium on the construction of new data centers due to their substantial electricity consumption.
Ultimately, Farazia noted that investors were turning to Johor Bahru, Malaysia, and Batam, Riau Islands, to build data centers. However, rather than locating these facilities within industrial zones, investors expanded into commercial and residential areas. This sparked protests from residents, who found the developments disruptive. In response to these complaints, Farazia stated that the Johor Bahru local government has prohibited the expansive development of data centers.
As a result of this situation, Farazia stated that Indonesia is finally able to absorb demand for data centers in both Batam and Jakarta. At the same time, she noted that the government is seizing investment opportunities driven by high internet penetration and a young generation raised in the technology era—factors that are fueling the growing need for data centers in Indonesia.
Beyond its role as a data center hub, Faraiza stated that the Indonesian government does not want the country to merely serve as a provider of rental services and electricity. Instead, the government is actively encouraging the development of a domestic technology industry ecosystem. She cited the facilities at the Nongsa Digital Park Special Economic Zone in Batam as an example, noting plans to transform them into an "AI factory."
According to Farazia, the development of AI technology production centers, such as microchip production centers, is expected to generate multiplier effects, including job creation. These effects can be directly felt by the public. This is because data center projects tend to generate fewer jobs than manufacturing projects. "We do not want to end up like Malaysia—where complaints have arisen, similar to those possibly seen in the United States, regarding data center construction—due to the perception that the multiplier effect is not as significant as that of building a factory," Farazia stated.
Farazia stated that the increased demand for land for data center projects is primarily driven by the need to accommodate the surging requirements of AI. He noted that about two to three years ago, the land requirement for a single data center was only around 5 hectares; now, that demand has jumped to 10–30 hectares per facility.
Fariza estimates that the power capacity of currently built and operational data centers stands at 450 megawatts (MW). These data centers have an occupancy rate of approximately 70 percent in Jakarta's business districts and 80 percent in Cikarang, Karawang, and East Jakarta. Alongside the expansion of these facilities, Fariza notes that electricity demand for data centers is rising, reaching 100–200 megawatts per project.
To accommodate those needs, Farazia stated that PT PLN requires a lead time of approximately two years. "And that is just for a single data center," she said.
Based on the discussions, Farazia concluded that PLN has an ample electricity supply. However, the challenge lies in the procurement process for preparing infrastructure, such as transformers for substations.
Read: Data Centers Account for 80% of Industrial Land Demand
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