CBRE: By 2025, investment in data centers in the Asia-Pacific region will exceed $11.6 billion, with power becoming a key factor in the competition.

A report by Savills pointed out that benefiting from the surge in demand for artificial intelligence, the investment in data centers in the Asia-Pacific region is expected to reach a historical high of 11.6 billion US dollars (approximately 904.8 billion Hong Kong dollars) by 2025. The report emphasizes that "power supply" has become the primary key in determining the location for new capacity expansion. The market focus is shifting from traditional hubs to Malaysia, Australia, and India, which have electricity advantages. The report states that while mature markets like Singapore and Hong Kong recorded moderate growth due to development restrictions, China's mainland is absorbing vacant space continuously, although at a slower pace. In the Hong Kong market, the demand for data center leasing continues to show resilience, mainly driven by large-scale cloud service providers, tech and e-commerce giants from the Mainland China, as well as multinational banks and international financial institutions (which have increasingly higher operational resilience requirements). Currently, a clear polarization trend is emerging in the Hong Kong data center market, with some tenants preferring to "take the lead" in occupying brand new, high-spec top-tier facilities, while others choose to rent short-term capacity of older assets as a transitional solution. This phenomenon is further widening the performance gap between modern and traditional data centers. After the peak of completion in the early stages, the Hong Kong data center market is gradually moving towards supply-demand balance. Due to limited new supply in the short term, coupled with continued leasing demand, it is expected that the vacancy rate of data centers in Hong Kong will gradually decrease in the next 12 to 18 months. Kelvin Li, Head of Industrial and Logistics at Savills Hong Kong, stated that AI is fundamentally reshaping the infrastructure needs of the Asia-Pacific region, with power supply becoming a key factor in determining the location for data center capacity deployment. In Hong Kong, despite supply and technological limitations, demand from financial institutions and large-scale operators remains resilient. With recent increases in new supply, the market is entering a more balanced phase; however, future growth will depend on Hong Kong's ability to support higher density facilities and unleash new development opportunities, including in the northern metropolitan area. As traditional market resources tighten, the Asia-Pacific data center market is undergoing a significant geographical shift. The large park model has become increasingly popular due to its ability to accommodate high-density AI computing workloads. Johor, Malaysia is expected to see a 53% increase in operational capacity by 2025, ranking at the top in the Asia-Pacific region; Melbourne, Australia recorded strong growth of 37%; while traditional markets like Singapore and Hong Kong, constrained by resources, only recorded a moderate growth of about 6% to 8%. To address power and regulatory constraints, such as South Korea limiting new projects in Seoul to 10 megawatts, Singapore implementing government green initiatives, and rising construction costs and extended construction cycles, investors and operators are shifting their strategies. Tailored projects, infrastructure partnerships, and alliances with local developers have become the new mainstream in ensuring power supply. In addition to traditional giants, a new type of emerging demand is appearing in the market - AI-focused cloud service providers. These providers specialize in providing high-performance AI computing infrastructure and are expanding significantly in the Asia-Pacific region through close collaboration with global and local enterprises. Cally Choi, Head of Research at Savills Asia Pacific, pointed out that the data center market in the Asia-Pacific region is undergoing a major reshuffle, with growth shifting from traditional first-tier markets to regions with electricity advantages. As AI applications accelerate, the Asia-Pacific region is expected to continue to be one of the most important growth regions globally and provide attractive opportunities in markets with power security and AI readiness.