Asia-Pacific Data Center Investment: Japan, Malaysia, Singapore, Korea and Australia

Asia-Pacific data center investment has become a multi-country race, as hyperscalers, AI labs and private equity platforms look beyond the traditional hubs of Tokyo, Sydney and Singapore. This guide, part of the Kurums Data Center Economy hub, covers Japan, Malaysia, Singapore, Korea, Australia and Indonesia: how much capacity each has, who is investing, and which policies decide where the next gigawatt goes. India, now the region’s second-largest market, has its own guide on India data center investment, and China is covered in China’s data center build-out.

How big is the Asia-Pacific data center pipeline in 2026?

Asia-Pacific’s development pipeline reached a record 26.5 GW in H1 2026, according to Cushman & Wakefield, after 7.1 GW was added in six months. Of that, 4.8 GW was under construction and 21.7 GW was planned, while 1.4 GW of new capacity came online during the half.

Southeast Asia now accounts for about half of the region’s under-construction capacity, a shift away from the North Asian hubs that dominated a decade ago. Colocation vacancy across Asia-Pacific tightened to 10.3% in H1 2026 from 10.9% in H2 2025, Cushman & Wakefield says, as AI pre-leasing absorbs new halls before they are finished. The firm expects Australia, India, Japan and Malaysia each to pass 2 GW of operational capacity by 2028.

The pipeline is concentrated in a handful of metros. Johor leads with 3,088 MW in Cushman’s count (Knight Frank’s wider definition puts it at 8,542 MW), followed by Sydney (2,134 MW), Bangkok (2,084 MW), Mumbai (1,726 MW) and Jakarta (1,699 MW). For a worldwide view of gigawatts under construction, see our data center construction pipeline statistics.

Source: Cushman & Wakefield Asia Pacific Data Centre Update H1 2026; Knight Frank Data Centre Atlas 2026; CBRE via Real Estate Asia; PLN via Databoks/Katadata. Definitions differ between firms.

Why has Johor become Asia’s data center hotspot?

Johor offers what Singapore cannot: land, cheaper power and room to build at gigawatt scale, just across the causeway from Singapore’s cable landings and cloud customers. Knight Frank ranks it the fastest-growing data center market in Asia-Pacific and the second most valuable after Japan.

Knight Frank’s Data Centre Atlas 2026 puts Johor’s live IT capacity at 1,110 MW, third in the region behind Tokyo (1,473 MW) and Singapore (1,118 MW), and values the market at about $39bn. Colocation vacancy is just 0.7%, the lowest in the region. Cushman & Wakefield counts 602 MW under construction in Johor, up 91%, and says combined operational and future capacity exceeds 4 GW. Malaysia as a whole had 1,039 MW under construction, the most in Southeast Asia.

Investors include ByteDance, Microsoft, Google, AWS and a long list of developers, among them AirTrunk, whose two new Malaysian data centres represent a RM12.7bn commitment and 280 MW of planned capacity. Land deals totalled RM1.02bn in Johor in H1 2026. But costs are rising: Knight Frank notes that higher electricity and water tariffs are narrowing Johor’s cost gap with Singapore, estimating that one 50 MW facility could face up to RM120m a year in power bills.

Malaysia’s policy reset

Malaysia is tightening rules as demand surges. In October 2026 Deputy Prime Minister Fadillah Yusof told Parliament that data centres must source at least 30% of their power from renewables, via self-generation or the Corporate Renewable Energy Supply Scheme. As of August 2026, data centres had contracted 2,346 MW of electricity demand but were using only 1,374 MW, while the energy ministry projects Peninsular Malaysia’s data centre demand at 8,391 MW by 2030, with Johor alone at 4,428 MW. The National Economic Action Council has also agreed to draft a Digital Infrastructure (Data Centre) Bill for Cabinet in 2027, which would put the sector under formal statute for the first time.

How does Singapore allocate new data center capacity?

Singapore controls growth through competitive Calls for Application run by the Economic Development Board and IMDA. In August 2026 its second call, DC-CFA2, awarded 200 MW: 50 MW each to Digital Realty, Equinix, Keppel Data Centres and ST Telemedia Global Data Centres, all on Jurong Island.

Singapore paused new builds in 2019, then reopened with a pilot call in 2022 that allocated 80 MW in 2023 to AirTrunk-ByteDance, Equinix, GDS and Microsoft. DC-CFA2, launched on 1 December 2025, drew 20 proposals. Winners must power more than half their capacity with green energy, achieve Green Mark DC Platinum certification and meet best-in-class energy and IT efficiency. The Green Data Centre Roadmap targets a PUE below 1.3 for new builds. All four projects sit in a new Sustainable Data Centre Park on Jurong Island, and the agencies will review the need for a third call in 18–24 months.

The result is a market of extreme scarcity and premium pricing. Knight Frank reports Singapore colocation vacancy at 4.9%, and Singapore’s constraints are the main reason demand has spilled into Johor and Batam. For operators, a Singapore allocation is valuable mainly for latency-sensitive, interconnection-heavy workloads rather than for large AI training clusters.

What is driving Japan’s data center investment?

Japan combines a large domestic cloud market, data-sovereignty demand and government support for regional campuses. Microsoft announced $10bn for 2026–2029 in April 2026, its largest Japan commitment, partly delivered through SoftBank and Sakura Internet.

Greater Tokyo is the core. CBRE counts 1,086 MW of operational capacity and a 2,544 MW pipeline in Greater Tokyo at Q1 2026; Knight Frank’s broader measure puts Tokyo’s live capacity at 1,473 MW, the largest in Asia-Pacific. JLL estimates more than 80% of Japan’s capacity is in Greater Tokyo and Osaka, and reports power delivery timelines of 8–10 years in Tokyo versus 3–5 years in Osaka, with planned supply in some Tokyo areas reportedly allocated through the 2030s.

That is why the government is steering new campuses to Hokkaido and Kyushu, where renewable power and land are more available, and why projects such as SoftBank’s conversion of the former Sharp Sakai factory near Osaka are attracting AI workloads. Japan also requires new data centres to meet a PUE of 1.3 or better. Investment interest remains high from global platforms: AirTrunk, for example, is expanding its Inzai campus near Tokyo, and in Osaka a CapitaLand Ascendas REIT and Mitsui joint venture paid $997m for a hyperscale facility leased to a global cloud provider for 14 years, according to CBRE.

How big is Australia’s data center opportunity?

Australia’s pipeline is one of the largest in the developed world. Commonwealth Bank estimates about A$260bn of data centre investment by the mid-2030s, roughly A$150bn of it by 2030, adding around 7 GW and taking rated capacity to about 9.2 GW.

CBA’s October 2026 analysis counts about 23 GW of announced capacity, but only 3.6 GW is under construction or being expanded and 2 GW has approval; three-quarters is still in planning. The Australian Energy Market Operator (AEMO) estimates data centres used about 5 TWh in 2025–26, 2.8% of electricity on the National Electricity Market, and forecasts about 15 TWh by 2029–30 and 34 TWh by 2035–36. AEMO also reported 225 projects seeking almost 67 GW of grid connections as of June 2026, a figure CBA considers heavily inflated.

Sydney leads with 917 MW operational and a 2,134 MW pipeline in Cushman & Wakefield’s count. In December 2025 NextDC and OpenAI agreed to jointly develop a roughly 550 MW AI campus at NextDC’s S7 site at Eastern Creek, a A$7bn project. AirTrunk, owned by Blackstone and CPP Investments since a A$24bn deal covered in our private equity platforms guide, announced a new Melbourne campus, MEL2, of over 350 MW and more than A$5bn, taking its Melbourne capacity past 630 MW.

What are Korea and Indonesia planning?

Korea is pursuing a state-backed AI infrastructure push, targeting 18.4 GW of AI data centre capacity by 2035 with more than 1 quadrillion won of planned spending. Indonesia aims to grow installed capacity from 580 MW to 1.3 GW, with Jakarta and Batam as its two hubs.

South Korea

The flagship is SK Group’s AI data centre in Ulsan with AWS. It started as a 100 MW project; in September 2026 SK chairman Chey Tae-won said the expansion was nearing 900 MW, with operations due to begin in the second half of 2027 and total investment of about 7 trillion won. SK Telecom has set a goal of up to 15 GW of AI capacity nationwide. Not everything is moving: the Korean Stargate data centres planned with OpenAI, Samsung SDS and SK Telecom after an October 2025 MOU had made little progress by September 2026, according to Korea JoongAng Daily, partly because suitable sites with enough power and water were hard to find.

Indonesia

Indonesia’s state utility PLN reported 322 MW operational in Jakarta with a 1,700 MW pipeline, and 126 MW in Batam with a 1,400 MW pipeline, as of September 2026. The government has said investments of $15–20bn are in the pipeline for Batam, which sits next to Singapore. Large projects include BDx’s Jatiluhur campus in West Java, designed to scale to 640 MW with a first 120 MW building due in early 2027. Execution risk is real: Indonesian authorities paused one BDx Jakarta construction site pending permits and an environmental assessment, and Knight Frank reports Jakarta vacancy at 20.5%.

Which investors are funding the Asia-Pacific build-out?

The money comes from three groups: US hyperscalers committing country-level budgets, private equity and infrastructure funds that own the largest platforms, and regional sovereign and telecom groups. AI labs are a newer fourth source of demand, signing anchor leases rather than owning buildings.

Hyperscaler pledges include Microsoft’s $10bn for Japan and large Australian and Malaysian programmes from AWS, Microsoft and Google. On the platform side, AirTrunk (Blackstone and CPP Investments), STT GDC, Princeton Digital Group, Digital Edge and NextDC compete for wholesale contracts across several countries. For the full ranking of operators, see our guide to the largest colocation providers.

Sovereign and Gulf capital is increasingly present, linking this region to the Gulf data center race. AI labs are taking big blocks: OpenAI with NextDC in Sydney, plus exploratory projects in Korea. The combination of long-term anchor leases and scarce power is pushing up valuations per MW, a trend explored in our analysis of the biggest data center M&A deals.

What risks could slow Asia-Pacific data center growth?

The main risks are power availability, water stress, regulatory tightening and over-announcement. Several markets have far more announced capacity than grids can connect, and governments from Malaysia to Singapore are adding sustainability conditions that raise costs.

Australia shows the gap between announcements and reality: AEMO’s median estimate is that only about 28% of projects seeking connections reach completion, and more than a third of connection requests were withdrawn in the past year, CBA reports. In Korea, power and water have stalled high-profile projects. In Malaysia, contracted demand already exceeds consumption by a wide margin, prompting closer scrutiny of new applications. Higher vacancy in Bangkok (23.3%) and Jakarta (20.5%) shows that not every new hub fills quickly.

There is also a demand question. Much of the pipeline assumes sustained AI training and inference growth. If AI spending slows, as bears in our AI data center bubble debate argue it could, secondary markets with speculative supply would feel it first. Supporters counter that pre-leasing levels and tight vacancy in Johor, Singapore and Tokyo show real demand rather than speculation.

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