Key Takeaways
- • Scott Choi, Managing Director, Real Estate & Data Centers at Actis, argues in a sponsored Institutional Real Estate article that South Korea and Japan are digital-first economies well positioned for data center growth.
- • Asia Pacific data center capacity is expected to expand at a 21% compound annual growth rate from 2024 to 2028, driven by hyperscaler demand, per the article.
- • South Korea leads OECD nations in IoT, big data and AI adoption rates (53%, 40% and 28%) and has a 90.5% fibre penetration rate; Japan's fibre penetration is 79.2% versus an OECD average of 46.9%.
- • Korean data center rack rates per kW have risen about 90% over four years, while land and power scarcity in Seoul and Tokyo creates barriers to entry that favor early movers with secured sites.
- • Actis has about US$3 billion invested in real estate and digital infrastructure and manages 360 MW of IT load across seven Asian data centers, including Project Epoch, which was 100% contracted by February 2024.
Summary
In a contributed article for Institutional Real Estate, Scott Choi, Managing Director, Real Estate & Data Centers at Actis, contends that South Korea and Japan are among the most attractive data center markets in Asia. He notes that while much industry discussion on data center expansion is US-focused, growth in Asia is driven by a combination of digital transformation, cloud adoption, 5G connectivity and AI. Hyperscalers account for roughly 80% of new global data center demand, with Amazon, Microsoft and Google reportedly holding 60% of hyperscale capacity worldwide, and Chinese hyperscalers are also a major source of demand in the region.
The article cites OECD-based data to support its thesis. South Korea has fibre penetration of 90.5% and leads OECD countries in fixed broadband subscriptions, while 97% of its population used the internet in the prior three months. Korean companies rank first among OECD nations in adoption of IoT, big data analytics and AI, and fifth in cloud computing at 70%. Japan has the highest concentration of supercomputers among major economies outside the United States. Both governments have advanced AI policy frameworks, including Japan's AI Promotion Act and South Korea's AI Framework Act, and the South Korean government has provided supplementary budget support for data center development.
Choi writes that Korean rack rates per kW have increased roughly 90% over four years, initially driven by cloud demand and more recently by AI. In Japan, data centers offer higher expected NOI yields than most other major real estate asset types. The principal constraint is land and power scarcity, particularly in Seoul and Tokyo; the article argues this favors early movers with secured land and power and specialist developers with energy and infrastructure expertise.
Actis, which first invested in South Korean data centers in 2020, describes itself as the first non-Korean firm to invest in data centers for hyperscalers in Seoul. The firm has about US$3 billion invested globally in real estate and digital infrastructure and 360 MW of IT load under management across seven Asian data centers. Project Epoch, a 26 MW Greater Seoul facility, has been fully contracted since February 2024 and was 90% handed over to tenants as of Q2 2025. Projects Epoch and Ditto obtained G-SEED and LEED Silver certifications in 2024 and target a PUE of 1.2x versus a market average of 1.5x. Epoch Digital's 65 MW greenfield Seoul project has 100 MW of power secured, and development commenced in Q2 2025. Actis plans to extend its offerings to AI clusters in less constrained regions such as Busan and Kyushu.
The article characterizes data center investments in these markets as offering strong mid-to-long-term demand growth, resilient demand through economic cycles, and high tenant retention. Note that the piece is a sponsored contribution by the Actis team and its market projections are the firm's own characterization of the sector.
The article cites OECD-based data to support its thesis. South Korea has fibre penetration of 90.5% and leads OECD countries in fixed broadband subscriptions, while 97% of its population used the internet in the prior three months. Korean companies rank first among OECD nations in adoption of IoT, big data analytics and AI, and fifth in cloud computing at 70%. Japan has the highest concentration of supercomputers among major economies outside the United States. Both governments have advanced AI policy frameworks, including Japan's AI Promotion Act and South Korea's AI Framework Act, and the South Korean government has provided supplementary budget support for data center development.
Choi writes that Korean rack rates per kW have increased roughly 90% over four years, initially driven by cloud demand and more recently by AI. In Japan, data centers offer higher expected NOI yields than most other major real estate asset types. The principal constraint is land and power scarcity, particularly in Seoul and Tokyo; the article argues this favors early movers with secured land and power and specialist developers with energy and infrastructure expertise.
Actis, which first invested in South Korean data centers in 2020, describes itself as the first non-Korean firm to invest in data centers for hyperscalers in Seoul. The firm has about US$3 billion invested globally in real estate and digital infrastructure and 360 MW of IT load under management across seven Asian data centers. Project Epoch, a 26 MW Greater Seoul facility, has been fully contracted since February 2024 and was 90% handed over to tenants as of Q2 2025. Projects Epoch and Ditto obtained G-SEED and LEED Silver certifications in 2024 and target a PUE of 1.2x versus a market average of 1.5x. Epoch Digital's 65 MW greenfield Seoul project has 100 MW of power secured, and development commenced in Q2 2025. Actis plans to extend its offerings to AI clusters in less constrained regions such as Busan and Kyushu.
The article characterizes data center investments in these markets as offering strong mid-to-long-term demand growth, resilient demand through economic cycles, and high tenant retention. Note that the piece is a sponsored contribution by the Actis team and its market projections are the firm's own characterization of the sector.
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