CLI says it has US$4.5 bil AUM across 27 data centres, APAC primed for data centre development

Data centre transactions in APAC rose about 2.4x to approximately US$22 billion from 2019 to 2023, compared to the last 5 years.

CapitaLand Investment (CLI) today owns 27 data centres with about US$4.5 billion assets under management (AUM) and more than 800 megawatts (MW) in gross power across eight countries globally, according to a research paper launched by CLI on July 5. 

Titled Asia Pacific Data Centre Investment Strategies in the Age of Digitalisation, CLI found that 97% of institutional investors plan to increase their capital allocation in the sector, particularly in Asia Pacific. 

The report found that while cloud computing has been the primary driver for DC demand, the rise of artificial intelligence (AI) is now fuelling a more explosive growth. On a population per MW basis, APAC markets are underserved compared to regions such as EMEA and North America.

“Asia Pacific economies are not only growing faster, the region’s enormous population and swelling internet user base also cements its status as a highly attractive destination for data centre investment. Its internet user base has grown seven-fold since 2005, compared to the growth of 1.9 times in the Americas and 1.8 times in Europe over the same period,” the report said.

Data centre transactions in Asia Pacific rose about 2.4 times to approximately US$22 billion from 2019 to 2023, compared to the preceding five years, even as markets generally stagnated during the Covid-19 pandemic. 

While hyperscalers continue to drive DC demand, APAC colocation market is also expected to double in size to US$52 billion by 2026, becoming the world’s largest colocation DC market. 

According to the report, key data centre markets in the Asia Pacific region are Singapore, Tokyo, Osaka, Seoul and Sydney. Beijing and Shanghai are also primed to be upcoming locations, due to China’s large population, growing digital services sectors, strong government support, and robust long-term economic prospects.

Finally, CLI highlights India as a hotspot for data centre investments. The seven major cities in India – Mumbai, Bengaluru, Chennai, Hyderabad, Delhi NCR, Pune, and Kolkata – are the focal points for new data centre development, offering strategic locations with proximity to key business centres. Mumbai stands out as the preeminent hub, hosting more than half of the country’s data centre with the other major cities mentioned developing strongly.

CLI notes that a lack of stabilised data centres available for sale in Asia Pacific means “promising opportunities” for investors in developing new data centres, a strategy that can both satisfy new demand and yield higher returns.