Key Takeaways
- • Asia Pacific data centre capacity is projected to expand at a compound annual growth rate of 21 percent from 2024 to 2028, driven by hyperscaler demand, digital transformation, cloud adoption, 5G connectivity, and AI deployment across the region.
- • Hyperscalers represent approximately 80 percent of all new data centre demand globally, with Amazon, Microsoft, and Google alone accounting for 60 percent of hyperscale data centre capacity worldwide, establishing a concentrated demand driver for infrastructure expansion.
- • South Korea and Japan represent particularly attractive investment opportunities within Asia's data centre sector due to their status as digital-first economies with supportive market conditions, though AI adoption is not necessarily the primary growth catalyst relative to broader digital infrastructure drivers.
- • Data centres function as essential infrastructure assets with sticky demand characteristics, combining real estate fundamentals with core infrastructure properties that create resilient investment profiles for institutional capital deployment.
Summary
South Korea and Japan are positioned as high-growth markets within Asia's rapidly expanding data centre sector, according to an analysis by Scott Choi, Managing Director of Real Estate & Data Centers at Actis, published in Institutional Real Estate in January 2026. While much of the global discussion surrounding data centre expansion focuses on artificial intelligence and concentrates on U.S. markets, Choi emphasizes that Asia's data centre momentum is being driven by a more diversified set of factors that extend beyond AI adoption alone.
The primary growth drivers across Asia include continued digital transformation, technological innovation, rising cloud adoption, and increasing connectivity enabled by 5G network deployment. These factors, combined with AI advancement, create a compound effect that is accelerating data centre demand. Critically, the article identifies hyperscalers—not only U.S. technology giants but also Chinese operators—as the dominant demand source, representing approximately 80 percent of all new data centre capacity globally. Amazon, Microsoft, and Google alone account for 60 percent of worldwide hyperscale data centre capacity, establishing a highly concentrated demand pattern that favors Asia Pacific as a secondary growth region.
The scale of this opportunity is substantial. Data centre capacity in Asia Pacific is expected to expand at a 21 percent compound annual growth rate from 2024 through 2028, signaling formidable sector momentum. This growth trajectory is creating new investment opportunities for institutional capital, particularly in digital-first economies like South Korea and Japan, where market conditions and infrastructure readiness support data centre expansion. Japan notably offers higher expected net operating income yields for investors evaluating deployed capital returns.
From a structural perspective, Choi characterizes data centres as essential infrastructure assets with real estate characteristics. The underlying economics reflect sticky demand driven by large-scale, continuous data generation and consumption requirements. This dual infrastructure-real estate profile provides institutional investors with exposure to resilient, demand-inelastic assets that benefit from both secular digital adoption trends and the capital intensity of hyperscaler buildout across Asia Pacific.
The primary growth drivers across Asia include continued digital transformation, technological innovation, rising cloud adoption, and increasing connectivity enabled by 5G network deployment. These factors, combined with AI advancement, create a compound effect that is accelerating data centre demand. Critically, the article identifies hyperscalers—not only U.S. technology giants but also Chinese operators—as the dominant demand source, representing approximately 80 percent of all new data centre capacity globally. Amazon, Microsoft, and Google alone account for 60 percent of worldwide hyperscale data centre capacity, establishing a highly concentrated demand pattern that favors Asia Pacific as a secondary growth region.
The scale of this opportunity is substantial. Data centre capacity in Asia Pacific is expected to expand at a 21 percent compound annual growth rate from 2024 through 2028, signaling formidable sector momentum. This growth trajectory is creating new investment opportunities for institutional capital, particularly in digital-first economies like South Korea and Japan, where market conditions and infrastructure readiness support data centre expansion. Japan notably offers higher expected net operating income yields for investors evaluating deployed capital returns.
From a structural perspective, Choi characterizes data centres as essential infrastructure assets with real estate characteristics. The underlying economics reflect sticky demand driven by large-scale, continuous data generation and consumption requirements. This dual infrastructure-real estate profile provides institutional investors with exposure to resilient, demand-inelastic assets that benefit from both secular digital adoption trends and the capital intensity of hyperscaler buildout across Asia Pacific.
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