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Demand for data centres in Asia Pacific is soaring, driven by rapid AI adoption and growing reliance on cloud services, according to CBRE. Despite projections that data centre capacity will double in three years, the region may face a shortfall of 15-25 gigawatts by 2028 due to limited power infrastructure and a lack of AI-ready facilities. AI-focused data centres require over twice the power density of traditional centres, along with advanced cooling and low-latency networks. Investment remains strong-direct volumes reached USD 4.7 billion in 2024-with developers pursuing asset repurposing and new land acquisitions. Markets like Japan, Australia, Korea, and Singapore are key demand hubs. Investors are advised to focus on advanced, scalable assets through acquisitions and partnerships to capitalise on this growth. Innovation in data centre design will be critical as the region strives to meet rising AI and cloud computing needs.
The rapid adoption of artificial intelligence (AI) and the growing reliance on cloud services are significantly driving up demand for data centres across the Asia Pacific region. Despite forecasts that the supply of data centre capacity will double within the next three years, the region is expected to face a considerable shortfall of between 15 and 25 gigawatts by 2028. This gap is primarily attributed to insufficient power infrastructure and a limited availability of AI-ready data centres, according to the latest research from CBRE. Advertisement
AI-focused data centres require more than twice the power density per server rack compared to traditional facilities. This demand entails advanced infrastructure, including sophisticated cooling systems, enhanced floor loading capacity, and a critical sensitivity to network latency and bandwidth. Many existing data centres and those currently under development were originally designed before the AI boom, meaning the Asia Pacific is now confronting a looming shortage of space capable of supporting these more power-intensive workloads.
Investment in the data centre sector remains robust despite these challenges. Data from MSCI and CBRE Research shows that direct investment volumes reached USD 4.7 billion in 2024, with strong activity continuing into early 2025. Operators and developers are actively exploring opportunities to repurpose stabilised assets and increase land acquisitions, even in the face of power supply constraints, prolonged construction delays, and community opposition.
Tom Fillmore, Executive Director of Data Centres, Capital Markets, Asia Pacific for CBRE, highlighted that investors aiming to benefit from the surge in AI workloads should prioritise more advanced data centre assets. He emphasised that focusing on mergers and acquisitions, as well as equity investments in operators with strong development pipelines, will be essential to achieving scalable and power-ready projects.
The data centre sector's solid fundamentals are expected to create numerous investment opportunities, whether through direct acquisitions, new developments, joint ventures, or platform investments. Newer, more technologically advanced assets are anticipated to attract growing investor interest, resulting in steady price appreciation.
Ada Choi, Head of Research, Asia Pacific at CBRE, added that the AI boom and the increasing need for cloud services will sustain strong demand for both co-location and hyperscale data centres throughout the region. She pointed to developed markets such as Japan, Australia, and Korea as key demand centres, with Singapore continuing to draw attention despite its limited supply.
This evolving landscape illustrates the pressing need for innovation in data centre design and infrastructure to meet the growing power and performance requirements brought about by AI and cloud computing. As the region strives to balance these demands with existing constraints, investors and developers who adapt by focusing on advanced, power-ready assets are likely to lead the sector's next phase of growth.
As power constraints and infrastructure gaps persist, the future success of investors and developers will depend on their ability to innovate and prioritise AI-ready, scalable facilities. Markets like Japan, Australia, and Korea, alongside Singapore's tightly constrained supply, underscore regional disparities that will influence strategic investments. Ultimately, those embracing the shift towards advanced data centre assets are poised to lead the market's transformation and long-term growth.
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