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New Straits Times
a day ago
- Business
- New Straits Times
Malaysia leads Asia Pacific in data centre growth, set for fastest consolidation by 2030
KUALA LUMPUR: Malaysia is set to become the fastest data centre consolidation market in Asia Pacific by 2030, driven by a robust development pipeline and surging digital demand, according to Cushman & Wakefield's Asia Pacific Data Centre Investment Landscape report. The firm attributed Malaysia's rapid rise to land availability, improving power and connectivity infrastructure, and consistent support for digital economy initiatives. These factors have made Malaysia a preferred destination for international data centre players and hyperscalers seeking scalable, cost-efficient hubs in Southeast Asia. The data centre consolidation market involves reducing the number of physical data centres or IT assets by combining, centralising, or migrating them to more efficient environments. The report highlighted a significant milestone in Malaysia's infrastructure readiness: its population-per-megawatt (MW) ratio, a key benchmark of data centre capacity, is expected to decline sharply from over 60,000 people per MW currently to around 14,000 by 2030. This 80 per cent improvement is the steepest among all regional markets, signalling Malaysia's aggressive efforts to build out capacity in line with the growing demand from AI, cloud computing, e-commerce, and digital transformation. Once viewed as a secondary option to Singapore, Malaysia has now carved out its own identity as a regional data centre powerhouse. Kuala Lumpur is becoming a key node for domestic demand, while Johor, thanks to its strategic location near Singapore, is being positioned as a prime base for hyperscale and AI-focused infrastructure developments. Other markets expected to follow in consolidation pace include Thailand and Japan. According to Pritesh Swamy, head of insights and analysis for Asia Pacific data centres at Cushman & Wakefield, most markets in the region are still significantly underserved, averaging over 350,000 people per MW, far higher than the US benchmark of around 30,000. "This ratio underscores the ongoing efforts in many markets to scale up infrastructure to meet the demands of economic and demographic expansion." The report highlighted a range of factors driving investment appeal, including strong demand fundamentals, resilient yields, inflation-hedging qualities, competitive cap rates, and growing recognition of data centres as essential infrastructure. Data centres are increasingly viewed as one of the most attractive asset classes, with growth expected to continue strongly over the next three to five years. Swamy added that economies with a gross domestic product above US$1 trillion are expected to remain dominant growth hubs over the next 3 to 5 years. However, transparency remains a challenge across Asia Pacific, with limited data on key financial indicators such as yield on cost and capitalisation rates, which complicates investor and lender decision-making. The report noted that Asia Pacific's data centre development pipeline stands at about 13 gigawatts (GW), expected to become operational by 2030. The required capital expenditure for this buildout is estimated at US$156 billion, underscoring the region's growth potential and relative cost efficiency. By 2023, the region's five largest data centre markets, Japan, China, Australia, India, and Malaysia, are projected to contribute 72 per cent of total annual colocation rental income in Asia Pacific. Each of the top five markets is projected to generate more than US$4 billion in annual colocation revenue, with the group contributing a combined US$32 billion by 2030. In terms of asset valuation, data centre assets across 14 Asia Pacific markets are forecast to reach US$600 billion in value by 2030, surpassing the US market's projected valuation of nearly US$460 billion. The five most expensive markets for data centre development in the Asia Pacific region are the advanced economies of Japan, Singapore, Australia, South Korea and Hong Kong/China. These markets collectively report an average development cost of about US$12.9 million per MW. Across the broader Asia Pacific region, the average development cost as of 2024 stands at US$10.1 million per MW, about 17 per cent lower than the US. Swamy said that the surge in Asia Pacific activity over the past five years has prompted most players to re-evaluate their land banks and existing properties for redevelopment opportunities. JLL Malaysia director of data centre transactions Kent Seet Tiong Hon said recently that Malaysia remains an attractive destination for data centre-related investments in the region, despite geopolitical risks. He said this puts the country in a favourable position compared to many of its global peers, which are facing similar pressures amid tightening regulations and rising costs. As of the first quarter of 2025 (1Q25), the country has completed an estimated 522 megawatts (MW) of capacity, with 1,250 MW under construction and over 3,750 MW in the pipeline. Seet pointed out that Malaysia's completed capacity of 522 MW places it ahead of key Southeast Asian peers such as Indonesia (270 MW) and Thailand (140 MW), although it remains behind Singapore, which has 1,000 MW.
Techday NZ
3 days ago
- Business
- Techday NZ
Asia Pacific set to overtake US in data centre capacity by 2030
Asia Pacific is forecasted to surpass the United States as the largest colocation data centre market globally before 2030, according to analysis by Cushman & Wakefield. The Asia Pacific Data Centre Investment Landscape report projects that by 2030, the region will possess approximately 23,904 MW of operational colocation capacity. In contrast, the United States is expected to have around 18,256 MW, placing APAC ahead in both capacity and projected rental revenue. Speaking on the findings, Pritesh Swamy, Head of Insights and Analysis for Cushman & Wakefield's Asia Pacific Data Centre Group, said: "Various forecast models show that Asia Pacific will overtake the United States as the largest colocation market in either 2028 or 2029. Based on the population differential, this is expected—but still significant given the depth and maturity of the US market." Based on the report's analysis, APAC colocation rental income is estimated to reach around USD $44 billion per year by 2030. Of this, 72% will be generated from the five largest markets based on capacity: Japan, Chinese mainland, Australia, India, and Malaysia. The report also indicates a significant market shift, with Malaysia anticipated to replace Singapore as the fifth largest market by or around 2029. Japan is positioned as the leading contributor among these markets, accounting for 22% of regional colocation revenue, an estimated USD $9.6 billion in 2030. Each of the other four top markets is also projected to generate in excess of USD $4 billion annually in colocation revenue. Changing development profiles Cushman & Wakefield's analysis identifies notable differences in operational approaches between APAC and the United States. Swamy commented on the capacity distribution: "Asia Pacific's higher proportion of operational colocation capacity, combined with higher average colo rents on a per kW basis, helped to drive the region's average rental rates above those in the US." Currently, colocation stock comprises 58% of operational data centre capacity in the United States compared to 85% in Asia Pacific. Projections show this gap narrowing incrementally through the decade. By 2030, colocation facilities are expected to account for 86% of total operational capacity in APAC, while the share in the US is forecast to rise to 61%. The report suggests that colocation capacity in the US will continue to grow in subsequent years, with hyperscale cloud and artificial intelligence providers turning increasingly to colocation services to keep pace with rising demand. Market indicators The Asia Pacific Data Centre Investment Landscape report is based on aggregated metrics across 14 regional markets. The analysis considers factors including population per megawatt of data centre capacity, regional demand, levels of direct US investment into APAC, capital expenditure requirements, rent revenue and cap rate estimates, and yield on cost. Population growth, increasing digitalisation, and strong regional economic activity are highlighted as substantial drivers for escalating demand and investment in data centre infrastructure across Asia Pacific markets. The anticipated increase in capacity and revenue is also predicted to result in evolving investment patterns and heightened focus from private and institutional investors in the APAC data centre sector.
Techday NZ
12-06-2025
- Business
- Techday NZ
Malaysia, Thailand & Japan lead Asia Pacific data centre growth
Malaysia, Thailand and Japan are forecast to register the fastest improvements in data centre capacity per capita across Asia Pacific up to 2030, based on new analysis from Cushman & Wakefield. The Asia Pacific Data Centre Investment Landscape report has found that Malaysia leads the region in the rate at which its population-per-megawatt ratio is set to decline, indicating considerable progress in aligning data centre infrastructure with population needs. According to the report, Malaysia's current figure of over 60,000 people per megawatt of operational colocation data centre capacity is projected to fall to about 14,000 people per megawatt by 2030 – an approximately 80% improvement based on present-day data. Malaysia's standing as a data centre market has shifted in recent years. Previously viewed as an overflow market for companies unable to use data infrastructure in neighbouring Singapore, Malaysia now serves not only domestic demand, particularly from Kuala Lumpur, but also regional requirements centred in Johor, catering to increased needs in artificial intelligence and cloud services. Regional benchmarks The report's data shows that other Asia Pacific markets are also undergoing notable changes. Thailand emerges as the second-fastest consolidating market in the region, with its ratio expected to decline by around 70%. The amount of people served per megawatt will drop from nearly 800,000 to about 220,000 by the end of the decade. Although this drop comes from a relatively low installed capacity base of 89 MW, interest in the sector has grown following the announcement in 2024 of new hyperscaler investment plans. Japan is identified as having the third-fastest rate of consolidation. The nation's population-per-megawatt ratio, currently at 94,000, is forecast to decrease to 30,000 by 2030. The report attributes this trend to several national factors, including Japan's long-standing attraction for international investors, political stability, a sizeable and affluent population, and its status as the world's fourth-largest economy by GDP. Global comparisons "Most Asia Pacific markets remain significantly underserved by data centre infrastructure, with an average of over 350,000 people per megawatt of data centre capacity. In contrast, the United States has a ratio of around 30,000 people per megawatt. This ratio underscores the ongoing efforts in many markets to scale up infrastructure to meet the demands of economic and demographic expansion." Report author and Head of Insights and Analysis for Cushman & Wakefield's Asia Pacific Data Centre Group, Pritesh Swamy, commented on the disparities highlighted in the report. He noted that most Asia Pacific markets are still catching up to international benchmarks regarding the accessibility of data centre resources. Influences on growth The Cushman & Wakefield report considers a range of factors influencing data centre investments, including projected rent revenue, yield-on-cost, capital expenditure requirements and expected demand for new developments, alongside GDP growth figures. On the correlation between data centre sector development and economic maturity, Swamy said: "As well as population drivers, the development of the sector is also correlated to economic maturity. Economies with a GDP exceeding US$1 trillion are expected to remain the primary growth hubs over the next 3 to 5 years." The study found that while population scale plays a crucial role in driving demand for infrastructure, markets with advanced economic structures and higher GDPs remain attractive for significant investment activity in the near term. Market outlook According to Cushman & Wakefield, continued data centre growth in Malaysia, Thailand and Japan reflects ongoing changes in the regional technology landscape. Malaysia's consolidation and expansion of data centre services, in particular, positions the country as a key market for domestic and cross-border data needs. Thailand's growing attention from hyperscale operators and investors indicates strengthening interest in Southeast Asian data centre capacities, whilst Japan's mature investment landscape sustains its steady expansion in the sector. The report draws on data from the International Monetary Fund and Cushman & Wakefield internal research and does not provide investment advice, but aims to contextualise capacity improvements within broader demographic and economic trends in the region.
