Megawatts, Not Square Meters: The Asia Pacific Data Center Market

The data center market in the Asia Pacific (APAC) region is measured not in square meters but in megawatts. The Cushman & Wakefield study for the second half of 2025 reveals a paradox: the region brought record capacity online, yet available capacity shrank.

The Region in Numbers

• about 1,557 MW of new capacity was commissioned, and the development pipeline added 5,033 MW;
• operational capacity in the region rose to 13,763 MW;
• the total pipeline reached 19,371 MW: 3,677 MW under construction and 15,694 MW planned;
• the vacancy rate fell from 12.4% to 10.9% over the year.

Mainland China remains the largest market with 39% of the region’s operational capacity, or 4.6 GW. The main reshuffle of the year: India added 285 MW, reached 1.5 GW and overtook Japan to become the second-largest market. Southeast Asia holds 31% of capacity under construction (1,123 MW), led by Malaysia (483 MW), followed by Thailand (347 MW) and Indonesia (236 MW). At current rates, Australia, India and Japan will become 2 GW markets by the end of 2028, and mainland China will reach 5 GW.

From Announcements to Construction

The main shift of the half-year is not in the numbers but in the phase. AI and cloud investment remained the dominant theme, but the focus moved from headline announcements to execution and capital consolidation. Hyperscaler projects moved from planning to construction, while operators concentrated on power availability, sustainability and high-density architectures.

Capital has become more disciplined. It still arrives through debt, equity and REIT structures, but investors favor scale, strong balance sheets and clear AI demand. Mergers and acquisitions shifted toward platform consolidation and the purchase of assets ready for AI workloads. Data centers have firmly become a core infrastructure asset class. At the same time, regulatory complexity, energy constraints and geopolitics increasingly shape site selection.

Four Market Groups and Scale

The researchers compare 30 markets across fifteen parameters and divide them into four groups:

• Leaders: Johor, Tokyo, Beijing, Mumbai, Sydney, Shanghai and Melbourne. 55% of operational capacity and 49% of the pipeline, with the lowest vacancy at 6.7%.
• Established: Seoul, Jakarta, Singapore, Hong Kong, Bangkok, Kuala Lumpur and Osaka. The fastest-growing group: 22% of capacity and 28% of the pipeline.
• Developing: Hyderabad, Chennai, Guangzhou, Delhi, Taipei, Pune and Auckland. 9% of both capacity and pipeline, with vacancy at 17.7%.
• Emerging: Canberra, Bengaluru, Manila, Busan, Batam, Ho Chi Minh City, Hanoi, Perth and Brisbane. Their share fell from 6% to 4%, with vacancy at 26%.

A sobering comparison: the total capacity of Johor, the largest APAC market by this measure, is 3,311 MW, Tokyo 3,111 MW and Beijing 2,982 MW. Northern Virginia stands at 32,960 MW, ten times more. Asian growth is starting from a very low base, which explains both the pace and investor appetite.

Johor and Tokyo: Two Poles

The Malaysian state of Johor has reached a turning point. The number of operational facilities rose from 12 to 21, and operational IT capacity more than doubled from 401 to 897 MW, up 124% in a year. The planned pipeline grew from 822 to 2,099 MW. Vacancy is just 0.7%, compared with the regional average of 10.9%. Microsoft is building its second Malaysian cloud region in Johor Bahru, and Empyrion Digital announced a 200 MW campus. Nearby, the 6 billion dollar Southern Johor Renewable Energy Corridor is being created, with up to 4 GW of solar generation and 5.12 GWh of storage. But the availability of power and water is shrinking, and tariffs are rising.

Tokyo holds 77% of Japan’s operational capacity, and vacancy contracted from 9% to 5.6%. Demand is outpacing new supply, so companies reserve capacity in advance. The government has responded with the Watt-Bit Collaboration initiative: instead of bringing electricity to computing, bring computing to electricity, in regions with surplus power. The Ministry of Economy allocated 72.5 billion yen (470 million dollars) to five national AI supercomputing programs, with the largest tranche of 50.1 billion yen going to Sakura Internet. In parallel, RIKEN, Fujitsu and NVIDIA are developing FugakuNEXT, a hybrid AI and high-performance computing system that aims for more than a fivefold increase in hardware performance over the current Fugaku.

Singapore, Sydney, Mumbai, Seoul, Bangkok

• Singapore: about 1,043 MW, only 20 MW under construction, vacancy at 4.9%. A second tender provides at least 200 MW under strict green conditions, and a 700 MW park on Jurong Island could expand national supply by about 50%.
• Sydney: vacancy fell from 5.2% to 3.0%, and the pipeline grew 17% to 1.3 GW. OpenAI and NextDC are exploring a Stargate AI data center of up to 550 MW.
• Mumbai: up 42% in a year, from 542 to 768 MW, with vacancy around 6%. Microsoft announced 17.5 billion dollars of investment in India, and Amazon more than 35 billion dollars by 2030.
• Seoul: up 16% to 601 MW, with the pipeline up 43% to 921 MW; about 30% of the market already lies outside traditional clusters due to shortages of power and land.
• Bangkok: capacity under construction jumped from 46 to 347 MW, and the pipeline grew more than 300% to about 945 MW; 36 projects worth more than 23.1 billion dollars were approved.

Where Supply Outran Demand

Next to markets with almost no available capacity, there are markets where half the space stands empty:

• lowest vacancy: Johor 0.7%, Sydney 3.0%, Singapore 4.9%, Tokyo 5.6%, Mumbai 6.3%, Seoul 6.9%;
• surplus: Bangkok 17.6%, Hong Kong 19.1%, Jakarta 24.9%, Ho Chi Minh City 35.4%, Perth 39.5%, Manila 47.9%.

Direction matters more than level. In Jakarta, vacancy fell from 36.0% to 24.9%, in Ho Chi Minh City from 54% to 35%, and in Delhi from 37% to 10.6% while capacity grew 41%. Manila is moving the other way: up 3.9 percentage points in six months. In Auckland, vacancy rose from 9.6% to 12.3% after the launch of an AWS cloud region, a normal price of step-change expansion in a small market. Hong Kong stands apart: vacancy holds at about 19%, but 16 projects in planning and construction promise about 670 MW, and a government tender at Sandy Ridge is expected to deliver 250,000 square meters of space near the border with mainland China.

Power, Water, Cables and 2026

Put the stories of all markets together and it becomes clear that the constraint has shifted. Capital is available, demand is obvious, and the bottlenecks are now electricity, water and network capacity.

• Power determines geography: Tokyo moves computing to regions with surplus energy, Seoul expands to the periphery, Johor builds a solar corridor, and Singapore approves capacity only with low-carbon supply. In Western Australia, replacing 1.4 GW of coal generation and adding 2.6 GW of wind and solar capacity make Perth more attractive for round-the-clock workloads.
• Water has become a design parameter: closed-loop cooling with zero evaporation in Johor and seawater cooling in Singapore are now permit conditions rather than marketing.
• Connectivity decides where AI is possible: the Bifrost cable (a direct Singapore to US West Coast route) and Asia Direct Cable came online, and TalayLink between Australia and Thailand was announced.

Despite US tariff pressure, the sector kept up a high pace. For 2026, the researchers expect demand to accelerate further thanks to AI, cloud and corporate digitalization, with demand remaining concentrated around hyperscale and AI deployments rather than quantum computing. A data center market review increasingly reads like an energy review.