Asia Pacific data centre investment hits record USD $11.6bn

CBRE has launched its 2026 Asia Pacific Data Centre Trends & Outlook Report, which found that investment in the region reached a record USD $11.6 billion in 2025.

The study highlights a shift in where new data centre capacity is being built, with access to power becoming a decisive factor for developers, operators and investors. It identifies Malaysia, Australia and India as markets drawing increased attention as artificial intelligence workloads push demand beyond long-established locations such as Singapore and Hong Kong.

Entity-level transactions accounted for USD $8.3 billion of total investment volume, reflecting a more mature market structure. Investors are increasingly pursuing asset-specific deals and seeking greater liquidity, while platform and operating company transactions are also expanding.

Operators across the region are also changing how they finance growth. More groups are turning to capital recycling and fund management structures to support expansion, strengthen balance sheets and broaden portfolio exposure.

Power shift

At the centre of the market's realignment is electricity supply. As AI-related demand rises, access to power is becoming more important than traditional location advantages for some occupiers, especially those developing large campuses for dense computing workloads.

A new source of demand is also emerging in the form of so-called neocloud providers. These companies focus on computing infrastructure for AI workloads and are expanding across Asia-Pacific through both international and local players.

Adoption remains selective. Some landlords are taking a cautious approach where tenant credit profiles are not yet well established, leaving Neoclouds as a developing demand segment alongside hyperscale cloud providers rather than a full replacement.

Matt Madden, Senior Managing Director, Data Centre Solutions, Asia Pacific at CBRE, linked that trend directly to site selection.

"AI is reshaping how infrastructure is selected and deployed across Asia Pacific," Madden said. "For neocloud providers, access to power is increasingly outweighing traditional location advantages. This is directing demand toward markets that can support high-density campuses at scale, particularly across India, Malaysia, and parts of Southeast Asia."

Growth markets

Among the markets highlighted, Johor recorded a 53% year-on-year rise in live capacity in 2025, making it the fastest-growing market in the region by that measure. Melbourne followed with 37% growth, while more mature markets, including Singapore and Hong Kong, recorded growth of about 6% to 8%.

Those figures underline a broader geographic redistribution of expansion away from traditional Tier I hubs. Large-scale campus projects are gaining ground in locations better equipped to meet the electricity and cooling needs of AI infrastructure.

By contrast, more constrained markets face rising barriers. Singapore is managing power shortages through government schemes, while South Korea has restricted new projects in Greater Seoul to 10MW.

Construction dynamics are also affecting where projects move ahead. Higher building costs and longer development lead times are increasing the value of sites that can be brought online quickly and that have secure on-site power from the outset.

That is shaping the strategy for both capital providers and operators. Built-to-suit developments, infrastructure partnerships and alliances with local developers are becoming more common as companies seek to lock in electricity access and navigate local regulatory conditions.

Regional reordering

The report frames these changes as part of a wider restructuring of the Asia Pacific data centre market. Rather than concentrating growth in a small group of established gateway cities, AI demand is broadening the range of markets able to attract investment and large occupiers.

CBRE's research suggests the region remains one of the main global growth areas for data centres, but future expansion will depend increasingly on whether markets can provide reliable power at the scale required by newer AI uses.

"Asia Pacific's data centre market is undergoing a significant reordering," said Ada Choi, Head of Research, Asia Pacific at CBRE. "Growth is shifting from traditional Tier I markets toward power-advantaged locations. As AI adoption accelerates, Asia Pacific is expected to remain one of the most important global growth regions, with attractive opportunities in power-secure, AI-ready markets."