Asia Pacific Data Centre Investment Hits Record High as Power Constraints Reshape Growth; Hong Kong Demand Remains Resilient Despite Technical Limitations

Asia Pacific data centre investment reached a record US$11.6 billion in 2025, as power availability increasingly determines where new capacity can be delivered, according to CBRE’s 2026 Asia Pacific Data Centre Trends & Outlook Report

As AI demand accelerates, growth is shifting beyond traditional hubs toward power-advantaged markets, including Malaysia, Australia, and India, redrawing the region’s data centre footprint. While mature markets such as Singapore and Hong Kong SAR recorded more modest growth, this was due to development constraints as opposed to a lack of demand. In mainland China, growth slowed as vacant space continued to be absorbed. 

Hong Kong: Demand Supported by Finance and Hyperscalers
In Hong Kong, leasing demand continues to strengthen, underpinned by hyperscale cloud service providers (CSPs), mainland Chinese technology and e-commerce companies, as well as financial institutions. Activity from multinational banks and international financial institutions is also gathering pace, supported by expansion needs and an increasing focus on operational resilience.

Demand remains polarised, with occupiers either opting to be early tenants in new, high-specification facilities or securing short-term capacity in older assets as an interim solution. This dynamic is widening the performance gap between modern and legacy data centre stock.

Market Rebalancing as Supply Cycle Matures
Following a period of significant new completions, Hong Kong’s data centre market is now transitioning toward a more balanced state. Vacancy is expected to gradually decline over the next 12–18 months, supported by sustained leasing demand and a limited near-term supply pipeline.

New development remains concentrated in established clusters such as Kwai Chung and Tseung Kwan O, while longer-term supply will be anchored by the Sandy Ridge Data Facility Cluster in the Northern Metropolis. The project is expected to deliver approximately 250,000 sq. m. of gross floor area, with operations commencing from 2029.

“AI is fundamentally reshaping infrastructure requirements across Asia Pacific, with power availability now a key determinant of where data centre capacity can be deployed,” said Samuel Lai, Head of Industrial & Logistics, CBRE Hong Kong. “In Hong Kong, demand remains resilient, particularly from financial institutions and hyperscale operators, despite supply and technical constraints. While the market is entering a more balanced phase following recent new supply, future growth will depend on the city’s ability to support higher-density facilities and unlock new development opportunities, including in the Northern Metropolis.”

AI-focused cloud providers Neoclouds Emerges as a New Demand Driver
Across APAC, A new class of AI-focused cloud providers Neoclouds is emerging as an additional source of demand. These providers specialise in high-performance computing infrastructure for AI workloads and are expanding through both global and local players.

APAC: A Geographic Reset
Malaysia and India are emerging as focal points among power-advantaged markets. In 2025, Johor led the region with a sharp 53% year-on-year increase in live capacity, followed by Melbourne at a 37% growth. This underscores strong expansion momentum outside mature markets such as Singapore and Hong Kong SAR, with around 6-8% growth.

Large-scale campuses are gaining traction in locations that can better accommodate high-density AI workloads. By contrast, facilities in more constrained markets face increasing challenges in meeting next-generation power and cooling requirements. For instance, Singapore addresses power constraints through government schemes, while South Korea has restricted new projects within Greater Seoul to 10MW.

Higher construction costs and longer lead times are also shaping supply. This reinforces the importance of sites that can be delivered quickly and with sufficient on-site power.  In response, investors and operators are prioritising built-to-suit projects, infrastructure partnerships, and local development alliances. These strategies help secure power access and navigate regulatory complexity.

“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.”

To read the full report, click here.