Malaysia and India are emerging as key data center growth markets as investments flow to power-advantaged markets. This is evidenced by the massive 53 per cent year-on-year increase in live capacity in Johor in 2025, followed by Melbourne at 37 per cent growth and Mumbai at 20 per cent.
The figures, according to CBRE’s 2026 Asia Pacific Data Centre Trends & Outlook Report, underscore the strong expansion momentum outside of mature markets such as Singapore and Hong Kong SAR, which averaged about 6-8 per cent growth.
The report, released recently, noted that power availability increasingly determines where new capacity can be delivered, and this is redrawing the region’s data center footprint.
Examples include large-scale campuses gaining traction in locations that can better accommodate high-density AI workloads such as Malaysia and India. On the other hand, matured markets like Singapore and South Korea face increasing challenges in meeting next-generation power and cooling requirements. This has prompted the two countries to address power constraints through government programmes and IT load restrictions.
Adding to the challenges across the board are higher construction costs and longer lead times. In response, investors and operators are prioritising built-to-suit projects, infrastructure partnerships, and local development alliances, to expedite delivery by securing power access and sites quickly as well as navigating the regulatory complexities.
“Asia Pacific’s data centre market is undergoing a significant reordering,” said Ada Choi, Head of Research, Asia Pacific for 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.”
Investment structures are also evolving alongside the high speed of change in the industry, the report noted. Investors are increasingly favouring asset-specific exposure and improved liquidity. Platform and operating company opportunities are expanding, with entity-level transactions reaching US$ 8.3 billion in 2025 on the back of a record Asia Pacific data centre investment of US$ 11.6 billion in 2025.
Increasing numbers of investors are adopting capital recycling and fund management models which support scale, strengthen balance sheets, and provide access to more diversified portfolios.
Alongside hyperscale demand is the emergence of a class of AI-focused cloud providers called “neoclouds.” These specialise in high-performance computing infrastructure for AI workloads. They are quickly expanding throughout APAC via both global and local players. However, the reception from landlords is still quite reserved especially in cases of newer entrants to the market.
“AI is reshaping how infrastructure is selected and deployed across Asia Pacific,” said Matt Madden, Senior Managing Director, Data Centre Solutions, Asia Pacific for CBRE.
“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.”
To read the full report: click here