The data centre renaissance reshaping APAC’s investment landscape
This article was originally published via AsianInvestor.
If you want to understand where the world’s digital future is being built, you no longer look to Northern Virginia. You look to the Asia-Pacific. From Johor’s industrial corridors to India’s swelling tech cities, a quiet but powerful boom is reshaping the region: the rise of hyperscale data infrastructure. As cloud adoption accelerates and artificial intelligence begins to permeate business strategy, demand for digital capacity is rising. And as that demand climbs, institutional investors are zeroing in.
Industry forecasts show the Asia-Pacific data centre market almost tripling from $29.5 billion in 2025 to nearly $79 billion by 2030, growing at a 22% CAGR per the Asia-Pacific Data Centre Market Report. Installed IT power capacity is forecast to grow at a five-year CAGR of 14.2% to reach 94.4GW by 2028, a rate of expansion unmatched in any other global region, according to the International Data Corp. Capital is flowing accordingly. Global data centre deals reached $61 billion in 2025, with APAC consistently drawing a large share of that activity, according to Reuters.
In other words, this is not a slow build. This is a surge.
Race for capacity across
Governments are no longer merely encouraging digital infrastructure; many are treating it as a strategic imperative. India has introduced its national data centre policy and expects the market to surpass 4,500 MW by 2030, backed by $20–25 billion in new investment. Malaysia’s Digital Investment Office is aggressively marketing southern Johor state as a regional hub. Indonesia has established special economic zones that cater specifically to data centre developers.
Meanwhile, hyperscalers are racing ahead. AWS, Google and Microsoft are collectively driving the steepest expansion curve in the region’s history, responding to demand for cloud capacity and AI computing. Across APAC, hyperscale footprints are expected to grow rapidly, with the region already accounting for around 27% of global hyperscale capacity, according to recent analysis from KPMG.
Even more telling is what is happening in the pipeline. Cushman & Wakefield reports that in just the first half of 2025, APAC added nearly 2,300 MW of new development, bringing operational capacity to 12.7 GW and signalling that the next wave of digital real estate is already being prepared.
Johor, Mumbai and Indonesia's Batam now sit at the centre of this unfolding infrastructure arc, each offering different mixes of scale, land availability, cost efficiency and connectivity.
Why investors are leaning in
Data centres offer long-term stability at a time when predictability is increasingly scarce. Leases often run 10 to 20 years and are typically backed by hyperscalers. Yields can be significantly higher than in the United States or Europe, where planning constraints have slowed expansion.
Demand also continues to exceed supply. In markets like Japan, Indonesia and India, available capacity is racing to keep up with cloud adoption, creating scarcity premiums and boosting asset valuations. And for diversified portfolios, data centres add a valuable layer of protection. They behave differently from traditional real estate and operate at the intersection of technology, energy and infrastructure, giving investors exposure to sectors that are otherwise difficult to access.
Navigating risk and regulation
Opportunity in Asia-Pacific comes with complexity shaped by both the variation in regulation across the region and the pace at which policy frameworks are evolving.
Across APAC, governments are increasingly treating data centres as essential economic infrastructure. As cloud adoption accelerates and AI workloads expand, regulatory approaches are evolving to support long-term digital capacity. This shift is reshaping how investors assess risk, moving the conversation away from whether markets are accessible and toward how quickly they are maturing.
What distinguishes markets across the region is how regulatory maturity, infrastructure readiness and policy alignment intersect. In emerging hubs, frameworks are still developing alongside growing demand. Power availability, permitting rules and energy strategy often evolve in parallel, creating both opportunity and uncertainty. In more established markets, the rules are clearer and enforcement more predictable, but growth is increasingly shaped by capacity limits, sustainability thresholds and competition for constrained resources.
Looking ahead, regulatory risk in Asia-Pacific is less about today’s requirements and more about how markets adapt over the next three to five years. Power constraints are emerging as an attributing factor as AI-driven demand accelerates. ESG scrutiny is intensifying as governments balance decarbonisation commitments with rising energy needs. Permitting timelines, grid investment and policy coordination will increasingly determine which markets can scale efficiently and which struggle to keep pace.
Taken together, Asia-Pacific does not present a single regulatory story, but a comparative one. The region is steadily institutionalising its approach to digital infrastructure, even as execution differs by market. For global investors, the opportunity lies in understanding where frameworks are stabilising, where they are still evolving, and where policy, infrastructure and capital are most closely aligned.
A region still built
The future of data driven growth is clearly shifting toward Asia-Pacific. Markets are advancing quickly, and the opportunities will continue to evolve as demand grows and national strategies mature. For investors, time is of the essence. Early participants will likely benefit from the quickly growing data centre renaissance in the APAC region. Those who take a long view and build strong local understanding will be well positioned as the region becomes an essential participant of the global digital economy.
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