The Asia-Pacific (APAC) data centre sector is experiencing unprecedented momentum, driven by surging demand for artificial intelligence (AI), widespread cloud adoption, and ongoing digital transformation. Global hyperscalers are projected to commit more than US$700 billion in capital expenditure in 2026, with a significant share directed towards AI-related infrastructure. APAC stands to benefit as these companies scale up GPU‑intensive infrastructure required for advanced AI workloads.
Key Insights
- Pipeline exceeds operational base highlighting delivery risk
- Southeast Asia ~44% of active construction
- Vacancy below 2% in Johor signals tight supply
- Execution capability now defines leadership
According to DC Byte, operational data centre capacity across APAC reached approximately 16.1 gigawatts (GW) as of Q2 2026. A record development pipeline of 25.5 GW is underway, including 3.6 GW under construction and 21.9 GW committed. Southeast Asia accounts for about 44% of active construction.
Vacancy rates are tightening because demand continues to outpace new supply. For investors, liquidity has become a crucial differentiator. Unlike traditional real estate, data centre liquidity depends on long-duration leases (often 10–20 years and inflation‑linked), strong sponsor support for future pipelines, and the ability to sell stabilised assets to fund the next wave of development.
The sector has moved on from its colocation roots, where developers constructed facilities, cultivated a broad enterprise tenant base, and expanded incrementally across markets. Capital flowed primarily to operator‑led projects with diversified income bases and manageable lot sizes. Today’s model looks quite different, with operators securing large land parcels, hundreds of megawatts pre‑committed to a handful of global technology companies, and facilities purpose‑built around a single tenant’s requirements.
Key Challenges
Strong fundamentals are tempered by structural headwinds that set data centres apart from conventional real estate – and that are becoming more visible as deal volumes increase.
Tenant concentration is a primary concern. Hyperscale campuses increasingly derive the bulk of their revenue from one or two global technology companies, creating meaningful renewal and credit risk at lease expiry. The Vantage acquisition of Yondr’s Johor campus – one of the largest hyperscale deals in Southeast Asia – was underwritten by a single Oracle lease.
Technological obsolescence is another pressure. Facilities without liquid‑cooling readiness or high‑density power upgrade pathways risk losing relevance as AI workloads intensify. Savvy buyers now insist on future‑proof design standards in acquisition agreements.
Regulatory and environmental complexity varies by market but is broadly tightening. Data sovereignty requirements, foreign ownership restrictions, power allocation approvals, and stricter power usage effectiveness (PUE) standards all add friction to development timelines and exit planning.
Exiting a data centre investment remains challenging. Single‑asset sales are uncommon, the institutional buyer pool is narrow, and – given the opacity of the market – comparable transactions are difficult to assemble because of the specialised nature of the infrastructure.
Data centres are moving from a development story to a capital-markets story. Platforms with real pipelines and credible customer demand are now better placed to unlock growth through refinancing and capital recycling, particularly as institutional capital looks for scaled exposure
Nicholas Tuan Director, APAC Advisory Services, Asia Pacific
Who Is Buying, and How?
The data centre investment market in APAC operates across several distinct formats, with investors taking different positions in data centre deals.
At the largest scale, platform acquisitions have defined the recent cycle. Blackstone and CPP Investments’ A$24 billion purchase of AirTrunk and KKR’s S$13.8 billion buyout of STT GDC represent transactions where real estate sits at the core, but the deal is structured around the operating business – priced on EBITDA multiples and encompassing development pipelines, customer relationships, and energy commitments alongside the underlying property.
Institutional capital — pension funds and sovereign investors in particular — has gravitated toward platform and joint venture structures for the scale and governance they provide. Aware Super's US$300 million minority stake in the vehicle that indirectly owns Vantage Data Centres' APAC assets, spanning Australia, Japan, Taiwan, Malaysia, and Hong Kong, is a recent example of this approach. GIC and ADIA deployed a combined US$1.6 billion into the same platform. In Hong Kong, Goodman assembled a US$2.7 billion joint venture seeded with six assets across its Tsuen Wan West campus, attracting PGGM, APG, CPP Investments, and CBRE Investment Management — one of the most significant institutional data centre vehicles yet formed in the city.
Listed REITs offer a more liquid entry point. NTT DC REIT's US$773 million Singapore IPO in July 2025, and AirTrunk's planned S‑REIT listing targeting a US$2.5 billion trust value, both reflect the sector's growing integration with public capital markets — though NTT's flat trading debut was a reminder that public appetite remains selective. Keppel DC REIT's fully subscribed S$404.5 million preferential offering, which successfully raised its full gross proceeds to part-fund its Inzai acquisition in Japan, offers a more encouraging signal of institutional investor conviction at the asset level.
Forward‑funded development — acquiring land ahead of delivery, typically with a hyperscaler pre‑lease in negotiation — now drives much of the active deal flow, particularly in Johor where operational vacancy sits below 2%. Bridge Data Centres, Digital Edge, Google, and an undisclosed buyer via EcoWorld have collectively committed close to US$450 million on Malaysian land in the past twelve months alone.
Straight asset sales remain concentrated in markets where scale and power are already in place. In Hong Kong, Actis is in negotiations to acquire Grand Ming's iTech Tower portfolio — two operating and two under-construction facilities in the New Territories — for a total consideration of up to HK$5.25 billion (approximately US$675 million), though the transaction remains subject to final agreement. In Japan, Keppel DC REIT completed the aforementioned acquisition of Tokyo Data Centre 3 in Inzai — a newly opened hyperscale facility fully leased to Microsoft — in November 2025 at JPY 82.1 billion (approximately US$560 million). In Malaysia, Vantage Data Centers closed the acquisition of Yondr Group's 300MW+ JHB1 campus in Johor in the same month, with the transaction funded through a US$1.6 billion equity raise led by GIC and ADIA.
Implications for Investors
APAC data centre liquidity is improving, but it is still highly selective. Platform deals and hyperscale campus trades are closing, yet the buyer universe for individual assets remains narrow and dominated by infrastructure private equity, sovereigns, and a small group of REITs – although it is gradually widening.
Liquidity should continue to deepen as more assets stabilise, cap rates become better evidenced, and lenders build a track record in refinancing operational data centres. Dedicated DC investment teams — from global managers and specialist platforms alike — are already accelerating that process.
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