As AI workloads and demand for cloud services increase, the world is facing unprecedented data centre growth. In Asia, demand for traditional computing is also expected to add to demand for data centre capacity. Data centre capacity in the Asia Pacific region is projected to double to around 30GW by 2027/2028. Notwithstanding, a supply shortage of around 15-25GW is expected.1
View full image: Estimated global data centre capacity demand (PDF)
Data centre investment in Asia has been far from uniform. Tokyo, Singapore and Hong Kong have historically outpaced their neighbours in development. However, developed markets face constraints in power and land supply, giving rise to new hubs in the region. In the emerging market space, Malaysia and Indonesia have outpaced their Asian neighbours in attracting investment in data centres, particularly Johor, Malaysia in respect of spillover demand from Singapore.2 In countries like Vietnam and Thailand, investment remains in nascent stages but are receiving growing interest from investors.
View full image: Asia-Pacific data centre transaction volume by market, 2014 to 2024 (PDF)
Investment case
Data centres present a strong investment case due to the sector's long-term and steady cashflows supported largely by credit-worthy Big Tech companies. To accommodate AI requirements, advanced data centres typically need to be supported by specialized cooling systems and floor loading capacity. These highly technical specifications mean that tenant portability across data centre sites is low.
Financing case
Highly technical specifications also translate to high capital expenditure requirements and demand for financing solutions to support growth. In 2024, data centre loan volumes in Asia increased close to 50% year-on-year to reach USD11bn over 20 deals. Demand for financing remains strong in 2025, with USD15.2bn across 21 transactions as of end-July 2025.3 There is no one-size-fits-all approach for data centre financing solutions, which cover the spectrum from greenfield development financing, corporate balance sheet financing, buy-out / leveraged financing to portfolio financings. Financing solutions have continued to evolve as investments trend towards hyperscale models.
Asian perspective
Investing in Asia presents its own unique set of challenges.
Energy stability remains an issue in Asia. Singapore imposed a moratorium on new data centre construction in 2019-2022 due to energy and climate concerns. Development for data centres in the region north of Taoyuan, Taiwan have been suspended since mid-2024.4 Generative AI models use exponentially more power – for instance, early applications of a Chat-GPT query were estimated to require 2.9 watt-hours as opposed to 0.3 watt-hours for a traditional Google search.5 Edge data centres are an attractive opportunity as traditional hyperscalers struggle to secure power. The smaller facilities can leverage established power infrastructure but are designed to optimize operations which require low latency. The Asia Pacific edge data centre market is anticipated to grow at an average annual rate of 25% per year beyond 2024.6
View full image: Data centre live capacity in Asia-Pacific (PDF)
Requirements to develop sustainably may constrain expansion opportunities in Asia. In Singapore, the Green Data Centre Roadmap sets Power Usage Effectiveness and Water Usage Effectiveness targets and new data centre capacity will be allocated to operators which prioritise both sustainability and economic value7. Other jurisdictions have also tightened sustainability requirements – Johor, Malaysia has rejected data centre applications for the reason that the operators did not demonstrate sustainable practices to reduce water and power usage.8
Many Asian data centre markets also tend to be dominated by local players. In Vietnam, a handful of local telecommunication companies operate data centres. In these markets, developers often form joint ventures with local players to navigate regulatory requirements and secure land. Investment structures may now change following regulations which allow for direct foreign investment and 100% ownership of data centre services.
The increasing focus on data sovereignty regulations is another key factor accelerating data centre development in the region. For instance, Vietnam mandates that providers which collect or process certain types of data to store such data locally and establish a local presence. In a similar vein, Sri Lanka is developing a cloud policy which requires critical government data to remain within sovereign environments.
Conclusion
Data centres are an essential piece to Asia's transition to the digital economy. There is also a positive shift towards a more supportive regulatory environment, creating opportunities for investors to tap on the growth story, especially in the space of advanced data centre assets. Nevertheless, peculiarities across the Asian markets often require innovative risk allocation approaches to safeguard investments.
1 CBRE, Inc., Asia Pacific Data Centre Trends & Opportunities, accessible at https://www.cbre.com/insights/reports/asia-pacific-data-centre-trends-opportunities
2 Savills plc, Asia Pacific Data Centres, Asia Pacific – January 2025, accessible at https://pdf.savills.asia/asia-pacific-research/asia-pacific-research/ap-data-centre-spotlight-01-2025.pdf
3 Mergermarket, Asian data-centre lending offers banks attractive opportunities amid slowdown in other sectors
4 CBRE, Inc., Asia Pacific Data Centre Trends & Opportunities, accessible at https://www.cbre.com/insights/reports/asia-pacific-data-centre-trends-opportunities
5 Abstract from Electric Power Research Institute, Powering Intelligence: Analyzing Artificial Intelligence and Data Center Energy Consumption, accessible at https://www.epri.com/research/products/3002028905
6 Savills plc, Asia Pacific Data Centres, Asia Pacific – January 2025, accessible at https://pdf.savills.asia/asia-pacific-research/asia-pacific-research/ap-data-centre-spotlight-01-2025.pdf
7 Prime Minister's Office Singapore, Speech by Deputy Prime Minister Heng Swee Keat at the Asia Tech x Singapore (ATxSG) 2024 opening ceremony on 30 May 2024, accessible at https://www.pmo.gov.sg/Newsroom/DPM-Heng-Swee-Keat-at-the-Asia-Tech-x-Singapore-2024-Opening-Ceremony
8 The Straits Times, Johor rejects nearly 30% of data centre applications to protect local resources, accessible at https://www.straitstimes.com/asia/se-asia/johor-rejects-nearly-30-per-cent-of-data-centre-applications-to-protect-local-resources
9 Savills plc, Asia Pacific Data Centres, Asia Pacific – May 2024, accessible at https://pdf.savills.asia/asia-pacific-research/asia-pacific-research/ap-data-centre-spotlight-05-2024.pdf
White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.
This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
© 2025 White & Case LLP
