Approximately US $116 billion will be needed to build out the existing colocation data centre pipeline across Asia Pacific in the coming five to seven years as demand for the sector grows, according to calculations by Cushman & Wakefield.
The global real estate services firm’s recently released H2 2024 Asia Pacific Data Centre Market Update External Link report shows the pipeline of colocation projects in the region either currently under construction or in late-stage planning stands at 12,452 megawatts (MW).
Using the construction cost of a mid-specification data centre for each market as a benchmark, the total capital required to build out the pipeline currently sits at US $116.2 billion.
By Cushman & Wakefield estimates, this development pipeline provides an opportunity to generate over $14.9 billion in annual colocation rent and can potentially achieve almost 13% yield-on-cost ratio for developers.
Report author and Head of Research & Insights, Data Centre Group, Asia Pacific Pritesh Swamy said:
“Demand for the sector continues to grow – the Asia Pacific development pipeline is already three times greater than existing operational capacity and as demand for cloud, AI, and large learning machine models increase, the CAPEX requirements continue to grow in scale.
“The investment potential of the sector has well and truly captured the attention of investors, as evidenced by the sector’s increasing share of annual real estate investment volumes.”
Source: MSCI-RCA; Cushman & Wakefield
Five markets account for 80% of pipeline
Of the 12.45 gigawatts (GW) in the pipeline (which excludes land banking activity and projects in early planning stages), over 80% is held in five markets: Japan, India, Australia, the Chinese mainland and Malaysia.
At a city level, Tokyo has the strongest pipeline within Asia Pacific at 1,656 MW, followed by Mumbai (1,143 MW), Johor (1,049 MW), Sydney (783 MW), and Beijing (613 MW). In these key cities, gross yield on cost increases to 14%.
According to the report, the data center capacity under development in Vietnam is approximately 92MW, with an average construction cost of US$6.9 million per MW. The country will need to attract around US$640 million in investment over the next 5-7 years. Until recently, Vietnam’s data centre market was dominated by local telecom companies. However, with the relaxation of ownership restrictions for data centre operators and various government initiatives, several global players have expressed interest in entering the market. Cloud service providers (CSPs), including Huawei Cloud and Alibaba, are also evaluating opportunities to establish cloud services in Vietnam. Among colocation operators, NTT, Gaw Capital, and Worldwide are planning to enter Ho Chi Minh City with their first data centres, while STT has announced plans to develop a 60MW facility. Several local operators, such as Saigontel, Viettel, and Vingroup, have already allocated land banks in HCMC for data centre development. Earlier this year, FPT Corporation announced a US$200M investment to build an AI factory, leveraging Nvidia’s AI Enterprise software and H100 Tensor Core GPUs. HCMC has emerged as the preferred location for data centre operators in Vietnam, with 75% of the total national development pipeline—both under construction and planned—concentrated in this city.
Trang Bui, Country Head of Cushman & Wakefield Vietnam said: “Despite these developments, Vietnam’s data centre market is still in its early stages, with the lowest population-to-MW ratio in the Asia Pacific region (1.83 million people per MW). However, with a population exceeding 100 million and an average GDP growth rate of 6.25%, the market presents significant growth potential in the coming years. To support long-term growth, the Vietnamese government must continue improving its digital infrastructure, including terrestrial and submarine cable connectivity, ensuring reliable and uninterrupted power supply, and fostering a policy framework conducive to data centre expansion.”
Capital Requirements by market (ranked by capital requirement)
| Market | Development Pipeline (MW) | Average Construction Cost / Market |
Capital Required |
| Japan | 2,678 | $ 13,235,400 | $ 35.44 |
| India | 2,299 | $ 7,126,938 | $ 16.38 |
| Australia | 1,610 | $ 9,632,409 | $ 15.51 |
| Greater China - mainland | 1,891 | $ 7,110,438 | $ 13.44 |
| Malaysia | 1,319 | $ 8,784,484 | $ 11.59 |
| Greater China - Hong Kong | 698 | $ 9,391,444 | $ 6.55 |
| South Korea | 618 | $ 9,504,758 | $ 5.87 |
| Indonesia | 517 | $ 9,024,147 | $ 4.67 |
| Thailand | 191 | $ 7,668,994 | $ 1.46 |
| Singapore | 124 | $ 11,740,262 | $ 1.45 |
| New Zealand | 147 | $ 9,259,955 | $ 1.36 |
| Philippines | 156 | $ 6,966,214 | $ 1.09 |
| Greater China - Taiwan | 113 | $ 6,393,241 | $ 0.72 |
| Vietnam | 92 | $ 6,935,600 | |
| Asia Pacific - total | 12,452 | $ 116.18 |
Note to Editors
1. All figures are in US dollars.
2. The 2025 Asia Pacific Data Centre Construction Cost Guide External Link is available here
3. The 2024 H2 Asia Pacific Data Centre Market Update is available here External Link
