Asia Pacific Data Centre Investment Landscape

Asia Pacific Data Centre Investment Landscape 2025

A PUBLICATION OF CUSHMAN & WAKEFIELD’S ASIA PACIFIC DATA CENTRE GROUP (APAC DCG)

Updated 11 June 2025

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

Contents

Included Markets

Introduction

3

Australia

Regional Capacity Growth

4

Chinese Mainland

Indicators •

Hong Kong, China

5

Population per Colo Megawatt

Taiwan, China

6

•

GDP and Regional Demand

India

7

• U.S. Direct Investment into Asia Pacific

Indonesia

Japan

8

•

CapEx Requirements

South Korea

9

•

Rent Revenue and Cap Rate Estimate

Malaysia

10

•

Yield on Cost

New Zealand

Final Thoughts on the Landscape

11

Philippines

Top 5 Rankings Across Indicators

12

Singapore

Thailand

Methodology & Definitions

13

Vietnam

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

Introduction to the report

Key Takeaways:

The Asia Pacific data centre market has rapidly evolved into one of the most dynamic and strategically significant asset classes in the global real estate investment landscape. Driven by the exponential growth of cloud computing, artificial intelligence (AI), and digital transformation across industries, demand for scalable, high performance data infrastructure continues to surge. This momentum is reshaping investor sentiment, positioning data centres not merely as operational infrastructure but as core investment-grade assets offering resilient income streams and long term value creation. This report provides a comprehensive assessment of the Asia Pacific data centre investment landscape, with a focus on fourteen key markets. It evaluates critical financial indicators such as capitalisation rates (cap rates), yield on cost (YoC), development costs, and total return profiles, offering insights into both stabilised assets and development opportunities. Amid tightening power availability, rising construction costs, and a growing shortage of AI-ready facilities, investors are recalibrating their strategies to capture value in a market characterised by both structural tailwinds and operational complexity. With institutional capital increasingly targeting the sector for its yield stability and inflation-hedging characteristics, understanding the nuanced interplay between market fundamentals and financial performance metrics is essential for informed decision-making. The geopolitical tensions and trade policy shifts—particularly involving the U.S. and China—pose risks to supply chains and investor confidence. Nevertheless, the structural demand for data, AI processing, and cloud services remains robust, positioning data centres as a resilient asset class amid macroeconomic uncertainty.

Data centres have emerged as one of the most attractive asset classes for investment, driven by robust demand fundamentals, resilient yields, inflation-hedging characteristics, competitive cap rates, and the increasing acceptance of the asset class as ‘critical infrastructure’. Most indicators point to sustained growth over at least the next 3 to 5 years. Key insights include: • Underserved markets across Asia Pacific: Most Asia Pacific markets remain significantly underserved, with an average of over 350,000 people per megawatt (MW) of data centre capacity. This ratio underscores the ongoing efforts in many markets to scale up infrastructure to meet the demands of economic and demographic expansion. • Economic scale as a key enabler: The development of data centres is closely tied to a market’s economic maturity and its ability to serve regional demand. While factors such as cloud adoption, IoT, and AI are direct demand drivers, economic and population growth also play a pivotal role. Economies with a GDP exceeding US$1 trillion are expected to remain primary growth hubs over the next 3 to 5 years. • Cost of construction not a primary driver: Lower construction costs are not necessarily a magnet for data centre development. Japan, despite being the most expensive market in the region, accounts for 20% of the Asia Pacific development pipeline 30% of the total CapEx required to build it out—more than any other market. The region requires an estimated US$156 billion in CapEx to deliver the capacity currently in the pipeline. • Early-stage markets command premium rents: Emerging markets such as Vietnam, New Zealand, and the Philippines exhibit higher colocation rents due to limited supply and a nascent operator landscape. These rents are expected to normalise as the markets mature and competition increases. • Attractive yield potential across the region: All Asia Pacific markets have the potential to deliver unlevered yield on cost greater than 10%. However, achieving optimal occupancy and returns depends heavily on factors such as location, build quality, and operational efficiency of respective facilities. • Strong U.S. investment presence: U.S.-based operators and investors account for 23% of built capacity and 29% of the development pipeline in Asia Pacific. U.S.-based hyperscale cloud service providers (CSPs) continue to deploy substantial capital through both self-build initiatives and colocation strategies, significantly accelerating regional data centre growth.

Author Pritesh Swamy

Head of Research & Insights, Data Centre Group, Asia Pacific

Key financial indicators such as yield on cost and capitalisation rates for data centres have remained largely opaque across most markets in Asia Pacific primarily due to a lack of comparable transactions and limited available data. With this report we aim to bridge these information gaps by offering valuable insights and forecasts to investors, lenders, and other key industry stakeholders.

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

Key Assumptions: • Development pipeline excludes early-stage projects • Vacancy is calculated on Operational Colocation Capacity compared to the Americas. Currently, colocation accounts for 85% of operational capacity in Asia Pacific, compared to 60% in the Americas and 75% in EMEA. Looking ahead, the development pipeline remains heavily weighted toward colocation across all regions, comprising 86% in Asia Pacific, 85% in EMEA, and 89% in the Americas. This trend highlights the strong investment potential of data centres as an asset class. Given that 85% of operational capacity in Asia Pacific is already colocation-based, the region also offers significant opportunities for investment in built and stabilised data centre assets. Regional Growth The development of new data centre capacity, measured in IT megawatts (MW), is projected to maintain a steep growth trajectory across all regions. Each region is expected to at least double its current operational capacity when the existing pipeline is fully built. This expansion will be driven by both colocation providers and hyperscale self-build programs, which are anticipated to grow at comparable rates. Key demand drivers fueling this global surge include the rapid adoption of cloud computing, artificial intelligence (AI), digital transformation initiatives, the Internet of Things (IoT), and the increasing creation and consumption of digital content. While AI-related demand has so far been concentrated in the United States, both the Asia Pacific and EMEA regions are expected to experience significant growth in AI-driven data centre demand over the next three to five years. Globally, there is over 80GW in the development pipeline. Colocation facilities account for approximately 90% of this pipeline. Despite substantial capacity additions over the past two to three years, the global vacancy rate remains low at just 7.5%, underscoring the strong and sustained demand for new infrastructure. The higher vacancy rate in Asia Pacific (11%) is largely owing to new capacity and is expected to decline in line with the region’s strong demand for capacity in the ready for service (RFS) phase. The Asia Pacific region presents a distinct development profile

AMERICAS 3.4X increase in total capacity

APAC 2.3X increase in total capacity

EMEA 2.3X increase in total capacity

• Operational Capacity: 20,562MW • Colocation: 12,269MW • Hyperscale: 8,293MW • Vacancy: 4.9% • Under Construction: 6,423MW

• Operational Capacity: 9,979MW • Colocation: 7,480MW • Hyperscale: 2,499MW • Vacancy: 7.7% • Under Construction: 2,896MW

• Operational Capacity: 12,325MW • Colocation: 10,517MW • Hyperscale: 1,807MW • Vacancy: 11% • Under Construction: 3,033MW

• Colocation: 4,597MW • Hyperscale: 1,827MW

• Colocation: 2,290MW • Hyperscale: 606MW

• Colocation: 2,641MW • Hyperscale: 392MW

• Planned: 46,077MW

• Planned: 9,611MW

• Planned: 12,496MW

• Colocation: 42,118MW • Hyperscale: 3,959MW

• Colocation: 8,315MW • Hyperscale: 1,296MW

• Colocation: 10,745MW • Hyperscale: 1,751MW

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

Population per colo Megawatt Market selection for data centre development is influenced by a range of factors, including cloud adoption, digital transformation, commercial activity, economic maturity, and the availability of physical infrastructure. Among these, population per MW serves as a useful proxy for identifying relative growth opportunities across markets. Despite being the most populous region globally, Asia Pacific remains significantly underserved in terms of data centre capacity when compared to the U.S.. The U.S. not only leads in operational capacity but also surpasses Asia Pacific in both under construction and planned capacities. This disparity underscores the substantial investment and development potential within the region. Currently, seven out of fourteen Asia Pacific markets serve more than 200,000 people per MW of data centre capacity. Even with the projected development pipeline through 2030, six markets are expected to remain above this threshold. This underscores a significant variance in data centre infrastructure per capita across the region and highlights substantial headroom for capacity expansion. Thailand, Indonesia, the Philippines, and Vietnam are still in the early stages of data centre development. These markets currently exhibit very low data centre density. While investor and operator interest is beginning to emerge, these markets may require a longer time horizon—potentially beyond 2030—to mature into fully established data centre ecosystems. While Hong Kong and Singapore demonstrate tight population per MW ratios, both markets serve broader regional demand in addition to domestic consumption. As well-established regional data centre hubs, they are strategically important in the Asia Pacific digital infrastructure landscape.

Population per MW (Colo) in 2024 and Forecast for 2030

2024 2030

1,773,459

500,000

1,251,113

1,340,004

1,095,326

791,230

692,563

573,146

449,306

373,955

351,310

366,349

239,824

219,601

202,321

157,962

50,000

98,993

No. of People

22,990

14,766

9,647

8,686

7,685

6,616

93,547 Japan

87,219 South Korea

13,933

60,603

30,636

63,484

30,113

42,059

19,314

22,867

5,000

Hong Kong, China

Singapore Australia Malaysia New Zealand

Taiwan, China

Thailand Chinese Mainland

Indonesia India Philippines Vietnam ASIA PACIFIC

USA

Source: IMF, Cushman & Wakefield APAC DCG

The population per colo MW ratio highlights significant headroom for growth across most markets in Asia Pacific • Except Australia, Singapore and Hong Kong, all markets in the region are currently serving over 60,000 people per MW, 2x higher than the U.S. • All markets excluding Chinese mainland and Singapore are forecast to optimise their population per MW ratios by over 50%.

• Malaysia, Thailand and Japan are forecast to witness the most consolidation, with ratios improving 78%, 72% and 68% respectively. • While most markets in the region are predominantly witnessing growth driven by domestic demand, Malaysia, especially Johor, is catering to international demand.

• The Asia Pacific region is on track to optimize its population per MW ratio by 55% however, it still forecasts to have a density of ~158,000 people per MW in 2030.

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

GDP & Regional Demand

GDP Share in Asia Pacific

Data Centre Capacity

Operational Share (MW)

Pipeline Share (MW)

Total Share (MW)

Markets

2024

2030

CAGR

Data centres are a critical component of the ICT ecosystem. Numerous studies have established a strong correlation between ICT infrastructure and GDP growth. Investments in ICT directly contribute to GDP by enhancing productivity and operational efficiency. Conversely, economic expansion drives the demand for more robust ICT infrastructure to sustain and support continued growth. The GDP of the Asia Pacific region is projected to grow at a CAGR of ~6%, rising from US$39 trillion in 2024 to US$54 trillion by 2030. This growth trajectory underscores the need for substantial ICT infrastructure enhancements across most Asia Pacific markets. This correlation between GDP and capacity is clearly seen on the Chinese mainland, which has a GDP of US$18 trillion and over 3.8 GW of operational capacity, and where the development pipeline has slowed in line with its slowing economy. Other markets with a GDP of greater than US$1 trillion— Japan, India, South Korea, Australia, Indonesia—are also among the region’s major data centre hubs. These markets account for 39% of the region’s GDP and 43% of its operational data centre capacity; these markets also account for 59% of the total APAC development pipeline. Adding in the Chinese mainland, these US$1 trillion-plus markets account for 90% of the region’s GDP and 73% of its development pipeline. Driving demand in the other major data centre markets— Malaysia, Singapore and Hong Kong China— is regional demand. Malaysia is experiencing dual growth dynamics: while Kuala Lumpur serves domestic demand, Johor is rapidly emerging as a regional hub for cloud services and artificial intelligence. Notably, Malaysia is one of the few markets with a significant presence of both American and Chinese hyperscale operators. Singapore is also a key regional data centre hub, although regulatory constraints mean it has the region’s slowest development pipeline. Hong Kong China continues to grow steadily as a regional connectivity hub and also has both Chinese and American operators present.

Chinese mainland

51%

52%

4.0%

37% (3,844)

14% (1,940)

24% (5,784)

Markets with more than US$1 Tn GDP Japan, India, South Korea, Australia, Indonesia

39%

38%

3.1%

43% (4,507)

59% (7,882)

52% (12,389)

Markets with less than US$1 Tn GDP Taiwan, Philippines, Vietnam, Thailand, New Zealand

7%

7%

3.1%

4% (434)

6% (739)

5% (1,173)

Markets predominantly serving regional demand Malaysia, Singapore, Hong Kong

3%

3%

2.5%

16% (1,732)

21% (2,825)

19% (4,558)

Source: Moody’s Analytics, Cushman & Wakefield APAC DCG

Key growth markets for data centre – economies greater than US$1 trillion or regional hubs • Asia Pacific’s GDP is forecast to increase by 23% between 2025 and 2030. The colocation MW capacity is estimated to increase by 127% to ~24GW during the same period.

• Comparatively, the U.S. is forecast to increase its GDP by ~US$8 trillion by 2030 whereas the MW is estimated to grow by 81% to >20GW. • The Chinese mainland’s economy has experienced a slowdown since 2021, which is reflected in relatively modest pipeline growth.

• At the end of Q1 2025, India emerged as the 4 th largest GDP globally and is further estimated to witness a growth of 45% in its GDP between 2025 and 2030. The MW capacity during the same period is expected to grow by 193%.

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

U.S. Direct Investment into Asia Pacific Over the past years, U.S. direct investment into the Asia Pacific region has expanded markedly, rising from approximately US$500 billion in 2009 to US$1.07 trillion in 2023, reflecting a compound annual growth rate (CAGR) of around 6%. This sustained growth underscores a gradual but notable increase in the region’s share of total U.S. outbound investment—from 14% to 16%—signaling a deepening investor confidence in Asia Pacific’s long-term economic trajectory. This trend is even more pronounced in the U.S. Direct Investment Abroad (USDIA) activities of American multinational enterprises (MNE). The proportion of net assets allocated to property, plant, and equipment (PP&E) in Asia Pacific rose from 23% in 2009 to 29% in 2022, with the absolute value increasing from approximately US$290 billion to US$450 billion. If this trajectory persists, PP&E investments in the region are projected to reach US$600 billion by 2030, reinforcing Asia Pacific’s role as a strategic hub for U.S. MNE investments. The data centre sector exemplifies this broader investment momentum. U.S.-based colocation providers and investors currently account for 23% of operational colocation capacity in Asia Pacific. Their influence is even more pronounced in the development pipeline, where they represent 29% of capacity under construction or planned. Beyond colocation, major U.S. hyperscale cloud providers have committed significant capital to self-build infrastructure programs, further accelerating digital infrastructure demand across the region. Geographically, U.S. data centre investments are concentrated in markets that are also the largest data centre markets in Asia Pacific— Japan (23%), Australia (21%), Malaysia (18%), Chinese mainland (14%), and India (10%). Collectively, these markets represent 86% (5.4 GW) of the total operational, under construction, and planned capacity by the U.S. colocation operators and investors. Several macroeconomic and structural factors underpin this strategic focus: Asia Pacific is home to 56% of the global population, boasts robust GDP growth projections, and continues to experience rapid digital adoption, rising consumption, and expanding investment opportunities. These dynamics position the region as a compelling destination for sustained U.S. capital deployment, particularly in sectors aligned with digital transformation and infrastructure modernisation.

Forecast 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 U.S. Direct Investment Position Abroad US$ billion 14.1% 15.2% 14.6% 15.3% 15.5% 15.9% 16.0% 15.7% 15.4% 15.2% 15.8% 15.5% 15.8% 15.5% 16.1% 16.2% 16.4% 16.5% 16.7% 16.8% 17.0% 17.1%

Rest of World

Asia Pacific

APAC Share

U.S. Investments in Net Property, Plant & Equipment

US$ billion

1,000 1,200 1,400 1,600 1,800 2,000

Forecast

33% 34%

32% 33%

31% 31%

30% 30%

28% 29%

27% 26% 27%

0 200 400 600 800

25% 24% 24% 24% 24% 25% 25%

23% 24%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Rest of World

Asia Pacific

APAC Share

Source: BEA, Cushman & Wakefield APAC DCG

*Source: Bureau of Economic Analysis (BEA), Government of the U.S.

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

CapEx Requirements

Total Investment Required for Developing the Capacity in Pipeline (includes land cost)

US$ million

79% Share

21% Share

CapEx Required 2025 – 2030 APAC $156 BN

50,000

46,759

The Asia Pacific region currently has ~13GW of data centre capacity in the development pipeline expected to become operational by 2030. The estimated CapEx required for this buildout is US$156 billion, underscoring the significant growth potential and relative cost efficiency of the Asia Pacific region. In addition to greenfield developments, there is a growing need for upgrading and modernising existing assets, particularly those over five years old. Rapid advances in computing, driven by cloud, AI, and high-performance workloads, have dramatically increased rack density requirements. Standard workloads now exceed 10kW per rack (up from under 6kW), while cloud deployments range between 15–30kW, and AI workloads exceed 60kW, with leading operators exploring densities >100kW. This shift is creating substantial demand for upgrades, particularly in power, cooling, and structural capacity. Over the past 2–3 years, operators have adopted diverse capital strategies to meet growing funding needs. Private equity has played a prominent role, deploying capital through both asset and platform acquisitions. Simultaneously, real estate developers have entered the sector, delivering built-to-suit facilities for operators. Strategic partnerships between developers and operators have also emerged, facilitating risk-sharing and efficient market entry, especially in high-demand regions. For investors, the data centre sector in Asia Pacific presents a compelling opportunity—characterised by strong underlying demand, long-term digital infrastructure needs, and attractive risk-adjusted returns through diversified investment structures and partnerships.

45,000

40,000

35,000

30,000

25,000

21,020 20,384

19,724

20,000

15,522

15,000

USA $91 BN

9,082 8,615

10,000

5,489

5,000

2,192

1,811

1,785 1,385

994

755

0

Japan Australia Malaysia India Chinese Mainland

Hong Kong, China

South Korea

Indonesia Thailand New Zealand

Singapore Taiwan, China

Philippines Vietnam

Avg. Const. Cost/MW excl. land

13.2 9.6 8.8 7.1

7.1

9.4 9.5 9.0 7.7 9.3 11.7 6.4 7.0 6.9

Source: Cushman & Wakefield APAC DCG

The cumulative CapEx required for developing the pipeline in APAC is estimated to be 1.7x of the U.S. • While the development pipeline in each market drives the overall CapEx requirements, the average development cost varies significantly across markets ranging between US$7.1 million per MW in Vietnam to US$16.1 million per MW in Japan. • Japan accounts for ~30% share in the total CapEx required for the development of the capacity in pipeline in Asia Pacific. • About 79% of the required CapEx is expected to be deployed in the top five markets - Japan, Australia, Malaysia, India, and Chinese mainland. • About 18% of the development pipeline capacity is already in active development. • Beyond 2030, and based on land banking by operators, the need for CapEx deployment will continue.

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Rent Revenue and Cap Rate Estimate By 2030, the top five data centre markets in Asia Pacific— Japan, Chinese mainland, Australia, India, and Malaysia— are projected to collectively contribute approximately 72% of the region’s total annual colocation rent revenue. Japan, supported by both high average rental rates and a robust development pipeline, is expected to lead the region with a 22% share of total rental revenue. Each of these top markets is forecast to generate over US$4 billion in annual revenue from colocation services. Collectively, these markets are projected to contribute approximately US$32 billion in annual colocation rental income by the end of the decade. In terms of asset valuation, the cumulative value of built data centre assets across 14 Asia Pacific markets is expected to reach approximately US$600 billion by 2030 based on current cap rates. In comparison, the U.S. market is anticipated to command a total valuation of nearly US$460 billion. On the investment front, Hong Kong China, Japan, Singapore, South Korea, and Taiwan have current cap rates below 5%. In contrast, emerging markets such as India, Indonesia, the Philippines, and Vietnam exhibit higher cap rates in the range of 7% to 8%, reflecting relatively elevated risk premiums and market immaturity. In addition, the region is witnessing rising demand for AI and machine learning (ML) workload deployments. These workloads have the potential to drive exponential growth in data processing requirements, compelling operators to accelerate the development of high-capacity, advanced facilities across the region to meet this emerging demand.

Annual Rent US$ million

Total Annual Colo Rent in 2030 and Current Prime Cap Rate

Cap Rate

72% Share

28% Share

Annual Colo Rent 2030 APAC $44 BN

12,000

9%

8%

10,000

7%

8,000

6%

5%

6,000

4%

USA $39 BN

4,000

3%

2%

2,000

1%

0

0%

Japan Chinese Mainland

Australia India Malaysia Singapore South Korea

Hong Kong, China

Indonesia New Zealand

Thailand Taiwan, China

Philippines Vietnam

Annual Colo Rent USD million Cap Rate (RHS)

Source: Cushman & Wakefield APAC DCG

The total annual colo rental revenue in Asia Pacific is forecast to surpass the U.S. by 2030

• The current average cap rate in Asia Pacific is estimated at 5.8%. • Beyond the local cost of capital, factors such as tenant profile, lock-in durations on lease contracts, land lease durations, occupancy rates, etc., can directly impact the cap rate estimates.

Notes for graph • The estimates are based on unlevered cost of capital. • For comparison, net property income (NPI) of 70% has been used for all markets. • Colocation rental income is the only source of revenue factored in the assessments. Other charges such as cross connects, internet, one-time set-up fees, add-on services, etc. have been excluded from the analysis.

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

Yield on Cost 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 approximately US$12.9 million per MW. In comparison, the U.S. records a lower average development cost of US$12.2 million per MW, representing about 6% discount over the advanced Asia markets. Across the broader Asia Pacific region, the average development cost as at 2024 stands at US$10.1 million per MW (about 17% lower than the US). This APAC development cost reflects a year-on-year increase of 3.8%, driven not only by inflationary pressures but also by escalating requirements for higher power density, which is significantly impacting construction specifications and costs. When examining Yield on Cost (YoC) across Asia Pacific markets—excluding Singapore and Vietnam—the range falls between 10% and 16%. Singapore is a notable outlier, delivering a YoC of 21% to 23%, supported by high rents, sustained demand, low vacancy, and an absence of new supply over the past five years. Vietnam, while still in the early stages of data centre development, presents a YoC ranging from 17.5% to 18.8%. This is attributed to a combination of high rental rates and comparatively lower development costs. Seven of the 14 markets in Asia Pacific are estimated to have a YoC of over 12%. These markets include Australia, Indonesia, New Zealand, Philippines, Singapore, South Korea, and Vietnam. Forecasts suggest that all markets except Japan will have lower or unchanged policy rates in 2030 compared to those at the end of 2024. Japan has returned to a positive range after keeping negative interest rates for over 10 years and forecast a slight uptick ahead.

Yield on Cost and per MW Development Cost Including Land Cost/MW US$million YoC - Low YoC - High

YoC %

US$ million

25%

20

23%

18

21%

16

19%

14

17%

12

15%

10

13%

8

11%

6

9%

4

7%

2

5%

0

Singapore Vietnam New Zealand Philippines South Korea Indonesia Australia Malaysia Chinese Mainland

Thailand Taiwan, China India Hong Kong, China

Japan ASIA PACIFIC USA

Source: Cushman & Wakefield APAC DCG

The YoC at an overall level in Asia Pacific is similar to the U.S., ranging between 11% and 12%

• The average year on year inflation rate (Consumer Price Index – CPI) across Asia Pacific is forecast at 3.1% between 2025 and 2030. • Except India (4.4%) all markets are forecast to have an average inflation rate of under 3% between 2025 and 2030.

Notes for graph - • For the purpose of comparison, net property income (NPI) of 70% has been used for all markets. • Colocation rental income is the only source of revenue factored in the assessments. Other charges such as cross connects, internet, one-time set-up fees, add-on services, etc. have been excluded from the analysis. • The estimates are based on unlevered cost of capital.

*Development cost is inclusive of construction and land costs

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Final Thoughts on the Landscape

some of the inputs necessary to studying the investment landscape—and certainly as it relates to arriving at a yield on cost analysis, which this report does. We are familiar with operating in developed markets in Asia Pacific where the land represents a majority proportion of the value. This would be true in markets like Tokyo, Singapore and Hong Kong. From an office perspective, at peak, the land value attributed to some of these downtown locations was 90%+. But we track some expensive data centre districts relative to the broader market in which they sit—examples include Gangnam, Seoul and Central Hyderabad—and it has taken us by relative surprise that a sensitivity analysis of land value has limited bearing on the prevailing yield on cost rates. (Although to caveat, we still need to build in additional factors around financing.) With data centres, the capital intensity is unlike most of what we have ever seen across the real estate landscape in the past, involving outsized delivery costs. Putting it all together To complete our look at the prevailing and future investment landscape we have intensely debated rents, rental growth, occupancy, efficiencies (NPI rates), and also cap rates. In my remarks accompanying the 2025 Asia Pacific Data Centre Construction Cost Guide, I spoke to the improvement we have begun to see in transaction activity at the asset level in Japan, Korea and Singapore. To that, we can add some additional evidence and transactions in Australia, although there is still a bit of artistry involved rather than embedding the out-puts entirely in science (evidence based). The inflationary period with corresponding elevated interest rates that we have been through (which of course is now in reverse in some markets), challenges how to differentiate entry cap rates with those on exit in ‘x’ years hence. In this report, we have modelled on a five-year basis. This five year time horizon was driven more by our visibility over the supply side during that period (i.e., what’s under construction and planned, as opposed to early stage) and our ability to map rents against that. We are of the opinion that most investments made by the capital today probably have five years as the minimum hold, noting the time duration of many of these projects, with seven years or even longer a more likely timeline for the infrastructure funds, (some) operators, and the core capital active including the growing REIT participation.

Rangu Salgame Chairman & CEO, Princeton Digital Group

Gordon Marsden Head of Capital Markets, Asia Pacific

AI and cloud computing are fundamentally transforming the digital infrastructure landscape. The scale and complexity of today’s data centres have grown exponentially, resulting in capital requirements that have increased multifold. Funding projects of this magnitude demands not only a very strong balance sheet but also access to deep pools of capital to ensure long-term success. At the same time, as projects become larger and more complex, delivery timelines are getting shorter. This makes efficient supply chain management and access to top engineering talent absolutely essential for delivering projects quickly and to the highest standards. Companies that excel in both areas will be best positioned to lead the current and next wave of data centre development. In the Asia Pacific region, we see Mumbai, Johor, Tokyo, and Melbourne emerging as the top AI markets, each attracting significant investment as data centres continue to be the most investible asset class.

It’s subject to debate, but let’s broadly call it five years in. Five years since the explosion of Asia Pacific activity in the data centre arena. Five years from it being a sideline topic at conferences to taking more of a centre stage; five years from AirTrunk not having a live presence in Singapore, to life after that notable M&A transaction; five years from Cushman & Wakefield’s first pan regional data centre report to this latest intelligence piece delving deeper and deeper into the drivers of the sector. In this time, most owners have now pored over their respective land banks and looked extensively at existing building portfolios for conversion or redevelopment potential. Yes, new locations will emerge as the infrastructure and regulatory environment to support data centre development continues to evolve, but by and large, the number of groups sat on land parcels purchased at historically low costs is diminishing. Now, and for the next five years (and beyond), the capital commitment for land alone takes on an impressive scale. We explore that here in this report. The Data Centre Difference For the last two years, Cushman & Wakefield has produced the Asia Pacific Data Centre Construction Cost Guide. The experience of that report informs

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Top 5 Rankings Across Indicators While the rankings across categories are derived from a statistical assessment, actual on-ground development may diverge due to a range of qualitative factors, including market maturity, overall size, and broader economic conditions. For instance, the top five markets in terms of Yield on Cost (YoC) also tend to have some of the least active development pipelines. However, factors such as elevated rental rates in mature markets like Singapore contribute to higher yields, despite limited new supply. This highlights the importance of interpreting rankings in context, rather than in isolation.

Development Costs per MW

Total CapEx Requirements (incl. Land)

Population per colo MW

Colo Rent Revenue

Yield on Cost

#

GDP in 2030

Lowest to Highest

Highest to Lowest

Highest to Lowest

Highest to Lowest

Highest to Lowest

Highest to Lowest

1

Singapore

Chinese Mainland Japan

Japan

Japan

Singapore

2

Hong Kong, China India

Australia

Chinese Mainland South Korea

Vietnam

3

Australia

Japan

Malaysia

Australia

Singapore

New Zealand

4

New Zealand

South Korea

India

India

Hong Kong, China Philippines

5

Malaysia

Indonesia

Chinese Mainland Malaysia

Taiwan, China

South Korea

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Methodology

Definitions & Disclaimers Asia Pacific

CapEx: The construction cost has been estimated using the Cushman & Wakefield Asia Pacific Data Centre Construction Cost Guide 2025. The cost reflects the average for a multi-level hyperscale data centre development spanning 10 acres with a capacity of 50MW. A proportionate land cost has also been included in the total capital requirement. Colocation rent revenue is calculated as the weighted average colocation rent, based on broad market demand estimates, multiplied by the total capacity. Occupancy adjustments ranging from 75% to 95% have been applied depending on the specific market. An annual rental escalation of 3% to 4% has been factored in for the period from 2026 to 2030. Power cost is considered as a pass-through. Cap rates for markets with recorded asset sale transactions—such as Japan, Singapore, Australia, and Hong Kong—the cap rate has been derived using the average transacted rates for data centre assets, as well as other proxy data, including industrial and office cap rates, as used for other markets. In addition to Cushman & Wakefield’s estimates, cap rates have been sourced from multiple external sources including MSCI RCA. Exit value and valuation of assets have been derived by dividing the NPI by the applicable cap rate. Net Property Income is defined as the net income after deduction of operating expenses from the total colo rent received from rack space leasing. Yield on cost is defined as the ratio of Net Property Income (NPI) to the total capital expenditure excluding cost of capital, including both construction and land costs. Further Notes: • The assessment has been done cumulatively for each market and at facility level. • All parameters—including capacity, vacancy rates, construction costs, rental escalations, NPI, colocation rents, population, GDP, and others—have been compiled for each of the fourteen markets. This data has been used to generate market-specific estimates and forecasts, from which Asia Pacific statistics have been derived. • All calculations are based solely on colocation capacity. Self-built assets have been excluded from all computations.

For all analysis, Asia Pacific region includes Australia, Chinese Mainland, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam only. ASEAN For this report, ASEAN refers to markets including Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, unless otherwise specified. Key Indicators • In operation refers to the total IT MW that is fully operational, leased and vacant combined. • Under Construction (U/C) refers to the total IT MW that has commenced construction at site with announced RFS date. • Planned refers to the total IT MW that has been committed and announced by the operator however, the physical construction at site may not have commenced. This capacity is held for future development and may not have a RFS date. • Vacancy rates are calculated by dividing the vacant space by the total capacity of a data centre. Vacant space refers to the IT MW capacity that has not been leased within the “in operation” capacity held by colocation operators. Source Population & Population Forecasts: IMF GDP & GDP Forecasts: IMF Data Centre Market Growth Forecast: CW estimates based of development pipeline in terms of MW between 2025 and 2030.

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CONTENTS >>

ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

More Data Centre Thought Leadership Signature Reports Cushman & Wakefield’s Asia Pacific Data Centre Group is a leader in first intelligence released regularly each year. We have a number of signature reports that will provide data centre operators, developers and investors insights to help develop their data centre strategies across Asia Pacific. to-market data centre thought leadership with quality market

Asia Pacific Capabilities Brochure Learn more about Cushman & Wakefield's data centre capabilities across Asia Pacific, including regional and local market insights, our services, key client case studies and contacts.

Asia Pacific Data Centre Construction Cost Guide (Annual publication) Cushman & Wakefield’s Asia Pacific Data Centre Construction Cost Guide provides a comprehensive analysis of both land purchase and data centre construction costs across Asia Pacific and looks at some of the key trends influencing the sector’s development: power availability and cost, AI, and investment.

Asia Pacific Data Centre Market Updates (Biannual publication) This biannual update, released at the end of H1 and H2 of each year, provides a comprehensive summary of Asia Pacific’s data centre market. It also features our Asia Pacific Data Centre Market Maturity Index forecasting the potential evolution of 30 markets across the region and provides an in-depth analysis highlighting 12 notable markets.

Global Data Centre Market Comparison (Annual publication)

Our annual Global Data Centre Market Comparison assesses over 60 data centre markets across the globe, within 13 different categories, including fiber connectivity, market size, cloud availability and others, to determine the top overall markets at a global and regional level, along with the top performers in each category.

Click or scan the QR code below for more info

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AUTHORS

Pritesh Swamy Head of Data Centre Research & Insights,

Gordon Marsden Head of Capital Markets, Asia Pacific gordon.marsden@cushwake.com

Data Centre Group, Asia Pacific pritesh.swamy@cushwake.com

ASIA PACIFIC DATA CENTRE GROUP (APAC DCG) Cushman & Wakefield’s Asia Pacific Data Centre Group (APAC DCG) helps our clients navigate their data centre strategies across the entire real estate cycle. We have the experience to offer both the practical services capabilities to provide optimal, end-to-end commercial real estate solutions and the problem-solving expertise to address highly complex IT requirements for our clients. FIND OUT MORE >

Tom Gibson Head of Project & Development Services, Sustainability & ESG, and Data Centre Group, Asia Pacific tom.gibson@cushwake.com

Amy Kelly Associate Director, Data Centre PR & Media, Asia Pacific amy.kelly@cushwake.com Shanil Patel Head of Management Services, Data Centre Group, Asia Pacific shanil.patel@cushwake.com Vivek Dahiya Head of Transactions & Advisory, Data Centre Group, Asia Pacific vivek.dahiya@cushwake.com

James Normandale Head of Technical Services, Data Centre Group, Asia Pacific james.normandale@cushwake.com

Rebecca Jung Associate Director, Business Development Services,

Data Centre Group, Asia Pacific rebecca.jung@cushwake.com

ABOUT CUSHMAN & WAKEFIELD Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com. © 2025 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.