Asia Pacific Data Centre Expansion Accelerates Amid Rising AI Demand
In the first half of 2025, the Asia Pacific region witnessed a remarkable surge in data centre development, with the total pipeline capacity expanding by nearly 2.3 gigawatts. This growth is largely driven by the increasing need for facilities equipped to support artificial intelligence (AI) workloads, reflecting the region’s strategic focus on digital infrastructure enhancement.
Pipeline Capacity Reaches New Heights
According to recent market analysis, the data centre development pipeline in Asia Pacific grew by 16%-an addition of 2,282 megawatts-since the end of 2024, bringing the total planned capacity to 16,620MW by June 2025. To put this into perspective, the new capacity is roughly equivalent to the combined operational data centre power of India (1GW) and Singapore (1.3GW), underscoring the scale of expansion underway.
Regional Highlights: Southeast Asia Leading the Charge
Southeast Asia is emerging as a hotspot for data centre growth, with Thailand and Malaysia accounting for 64% of the newly planned capacity in the first half of the year. Thailand’s pipeline capacity skyrocketed by 193% from a modest base, while Malaysia saw a 70% increase. This rapid development is transforming cities like Bangkok and Johor into critical hubs for cloud and AI infrastructure.
Bangkok’s Data Centre Market Booms
Bangkok’s planned data centre capacity surged by 177%, climbing from 186MW to 515MW, while facilities under construction grew by 267%, from 46MW to 169MW. Although operational capacity increased slightly to 109MW, the vacancy rate dropped significantly from 24% to 16%, signaling strong demand and a tightening market. These trends position Bangkok as a rapidly growing centre for digital infrastructure in the Asia Pacific.
Johor’s Expanding Footprint
Johor, Malaysia, experienced a 40% increase in operational capacity, adding 160MW within six months. Construction-stage capacity rose by 87% to 422MW, and planned capacity expanded by 61% to 1,324MW. Despite Malaysia’s introduction of new power tariffs in July 2025-expected to raise electricity costs for data centres by 10-14%-Johor remains one of the most cost-effective locations in the region, maintaining its appeal as a cloud and AI hub.
Market Dynamics and Investment Trends
Asia Pacific’s operational data centre capacity currently stands at 12.7GW, with 3.2GW under construction and an additional 13.3GW in the planning phase. Mainland China continues to dominate with 4.6GW of operational capacity, followed by Japan (1.5GW) and Australia (1.3GW). Investor confidence remains robust, supported by strong capital markets and a surge in private equity acquisitions targeting AI-ready and hyperscale data centre platforms.
Noteworthy transactions in the first half of 2025 include SoftBank’s $685.8 million acquisition of the Sharp Sakai LED factory in Osaka, slated for conversion into an OpenAI data centre. In Singapore, CapitaLand Ascendas REIT purchased a facility for $364 million from private trusts affiliated with CapitaLand Group. Bain Capital also invested $275 million in two projects in Hong Kong, acquiring them from Grand Ming.
Future Outlook: Co-Location Data Centres and Capital Investment
Looking ahead, the co-location data centre segment in Asia Pacific is poised for substantial growth. Estimates suggest that over $116 billion will be required to develop co-location facilities over the next five to seven years, driven by escalating demand for scalable, flexible infrastructure.
By the end of 2024, the co-location pipeline-excluding hyperscale projects-stood at 12,452MW in construction or advanced planning stages. More than 80% of this capacity is concentrated in five key markets: Japan, India, Australia, mainland China, and Malaysia, highlighting the strategic importance of these countries in the region’s digital infrastructure landscape.
