Data centers have become the new frontier for global investors looking to capitalize on the growing demand for computing and data storage in the Asia-Pacific region. With giants like Amazon and Google expanding their cloud services and the rise of artificial intelligence fueling data and capacity requirements, Asia is experiencing a surge in demand for data centers. Additionally, the region’s growing population is driving the need for more storage facilities.
According to Cushman & Wakefield data, demand for data centers in Southeast Asia and North Asia is expected to grow by about 25% per year through 2028, outpacing the 14% annual growth rate in the US. This trend is following the pattern of the US, where data center investments preceded similar growth in Europe and are now making their way to Asia.
Global investors have already begun making moves in the region. Bain Capital recently announced a deal to take Beijing-based Chindata Group Holdings private, valued at $3.2 billion. KKR & Co. acquired a 20% stake in Singapore Telecommunications’ regional data center business for $800 million. Blackstone Inc. has also launched its first wholly owned data center platform in Asia. KKR sees the potential to invest $1 billion in equity on data center projects in the Asia-Pacific region in the coming years.
The bet for investors is that Asia will command a larger share of the data center market in the future. Currently, about 29% of hyperscale cloud revenue is generated in the Asia-Pacific region, compared to 49% in the US. By 2028, Asia’s share is expected to increase to 33%, reaching $173 billion.
While the investment opportunities are promising, there are challenges to overcome, including navigating complex regulations and environmental requirements in the highly fragmented Asian market. However, the growing demand for data centers driven by cloud services and AI makes this an attractive investment opportunity for global investors.
Overall, the rise of Asia as a prime destination for data center investments highlights the region’s potential for growth in the digital economy and its increasing importance in the global tech landscape.
The source of the article is from the blog publicsectortravel.org.uk