2026 Asia Pacific Data Centre Trends & Outlook

The Asia Pacific data centre market continues to experience an unprecedented boom, with demand expanding rapidly on the back of AI implementation, cloud adoption, and digitalisation.

AI demand is driving new data centre development in the region. Global hyperscale demand is growing at a CAGR of 14%, while tech firms plan to increase CapEx on AI by 61% in 2026. U.S. hyperscalers remain among the most aggressive players, while mainland Chinese tech companies are also stepping up their CapEx in AI, albeit at a lesser magnitude.

The increasing prominence of Neocloud providers have emerged as a new demand driver over the past 12 months. Neocloud providers first emerged in 2023-2024 and rapidly gained traction in 2025 as a specialised category of cloud providers designed specifically for high-performance computing workloads. Strong demand for this level of computing power has pushed the sector to expand rapidly, with some Neocloud providers already publicly listed. 

The data centre supply pipeline is robust, but expansion is outpacing capacity, making power availability a major challenge for operators. Data centre electricity consumption in the region almost doubled from 2020 to 2024 and is expected to triple in size over the next few years. New data centre builds are also increasing in capacity, with average sizes now exceeding 100 megawatts. Intensive AI workloads are placing further strain on power infrastructure. 

In addition to a lack of power availability, elevated construction costs are the next most pressing issue to data centre development, with intense competition around AI buildouts significantly pushing up development costs. Rising land prices, the use of advanced liquid cooling, and regulatory compliance related to sustainable buildings are also contributing to higher data centre construction costs.

The Asia Pacific data centre industry is experiencing a significant shift, from concentrated growth in traditional leading markets to rapid expansion in markets like Southeast Asia and India.
 
On the data centre investment front, activity remains robust. Direct investment volume has grown steadily over the past seven years, reaching a record high of US$11.6 billion in 2025, amid sustained demand for stabilised assets, development sites and conversion opportunities.
 
Entity-level transactions have been relatively scarce but account for a significant share of capital deployment. These strategies, primarily through platform and OpCo investments, provide investors with an efficient pathway to scale, particularly those targeting larger-scale assets or multi-market portfolios. 

This report by CBRE Asia Pacific Research explores the key data centre demand drivers, investment trends and outlook for the sector, offers key country and market-level insights, and lays out potential strategies for data centre investors and operators.