CBRE’s annual Global Data Centre Investor Survey reveals that healthy activity in the data centre space in Asia-Pacific in 2023 with total transaction volume in asset sales capped at US$1.1 billion in 2023.
Investor appetite in 2024
“Each region will face its own unique challenges and opportunities but everyone in this space will benefit from the ongoing institutionalisation of the data centre asset class and strong industry fundamentals,” said Tom Fillmore, executive director of data centres, capital markets Asia Pacific at CBRE. “Despite high interest rates and inflation, the market is expected to revive, especially in Japan and Korea where stabilised assets are likely to attract investors.”
The growth of AI has driven the demand for larger and more sophisticated data centres. While investors intend to materially increase investment this year, limited supply and construction delays have led to high rental growth rates. More new entrants are expected in the Asia Pacific region due to this trend.
“Insatiable demand from major occupiers for data centre consumption, especially in the Cloud and AI sectors, has driven the growth of this asset class in the region,” said Dedi Iskandar, head of data centre solutions for Asia Pacific at CBRE. “Occupiers are now competing aggressively to increase their data centre footprint to accommodate the future needs of their business. APAC’s lag in infrastructure compared to Europe and the U.S., along with a large gap between capacity and demand, led to a significant rental increase which has made the region very appealing to data centre investors.”
Data centre factoids:
Increasing investment: 97% survey respondents say they will increase their investment in data centres in 2024. Forty-four per cent say they will allocate more than US$500 million for data centre investment, a significant increase from the 32% last year.
Shift in investment focus due to market dynamics: 80% of investors say they are interested in the opportunistic new development in 2024. This includes a ground-up development, re-purposing of existing assets, or redevelopment.
Interest in hyperscale build-to-suits: Thirty-one percent of respondents said hyperscale build-to-suits are the greatest investment opportunity over the next 12 to 24 months, the most common answer.
