Home > > > APAC Data Center Colocation Market: Size, Trends, Opportunities, and Regional Outlook Through 2031

APAC Data Center Colocation Market: Size, Trends, Opportunities, and Regional Outlook Through 2031

Author : jena snigdha | Published On : 29 Aug 2026

The Asia-Pacific (APAC) data center colocation market is entering a period of rapid expansion, driven by accelerating digitalization, cloud adoption, artificial intelligence (AI), edge computing, and the growing need for scalable digital infrastructure. The market was valued at USD 27.19 billion in 2025 and is projected to reach USD 64.08 billion by 2031, registering a CAGR of 15.36% between 2025 and 2031.

China remained the largest contributor to the APAC data center colocation market in 2025, accounting for approximately 37% of regional colocation investments, while Southeast Asia represented around 21%. The region's expanding digital economies, increasing hyperscaler investments, and rising AI workloads are creating unprecedented demand for secure, reliable, and high-performance colocation infrastructure.

From large-scale data center campuses across China's provinces to rapidly emerging hubs in Malaysia, Indonesia, and Vietnam, operators and investors are increasingly targeting APAC as one of the world's most attractive digital infrastructure markets. The market currently covers 870 existing facilities, 905 upcoming projects, 174 companies, and nine market segments across 17 countries, providing significant opportunities for colocation operators, hyperscalers, technology providers, and infrastructure investors.

APAC Data Center Colocation Market Growth Drivers

Rapid Digitalization Fuels Data Center Demand

Digital transformation has become one of the primary catalysts for data center development across APAC. Countries throughout the region are rapidly adopting cloud computing, e-commerce, fintech, AI, IoT, and other digital technologies, resulting in a substantial increase in data generation, processing, and storage requirements.

As businesses and consumers increasingly rely on digital services, organizations require infrastructure capable of supporting real-time data processing, high availability, and low-latency connectivity. This trend is strengthening demand for colocation facilities, particularly in major metropolitan areas and emerging digital hubs.

Government-backed digital transformation programs are further supporting this growth. For instance, in January 2025, South Korea's Ministry of Science and ICT planned a joint project worth approximately USD 30 million with ASEAN to promote digital transformation across South Korea and ASEAN through 2029. Such initiatives are expected to contribute to the long-term expansion of digital infrastructure across the region.

AI Emerges as a Major Data Center Growth Catalyst

The rapid adoption of AI is transforming the requirements of data center infrastructure across APAC. Governments are increasingly developing national AI strategies and supporting investments in AI infrastructure, while enterprises across healthcare, financial services, manufacturing, and technology are adopting AI applications to improve productivity and operational efficiency.

AI workloads require significantly higher computing power, greater power availability, and advanced cooling infrastructure than many traditional workloads. As a result, colocation providers are increasingly developing facilities capable of supporting high-density computing environments.

Taiwan, for example, announced in November 2025 an allocation of approximately USD 3.2 million toward AI infrastructure development, supporting its ambition to become a global AI leader by 2040. The initiative focuses on technologies including photonics, quantum computing, and AI robotics.

The growing emphasis on AI-ready infrastructure is expected to increase demand for high-density colocation facilities, advanced power systems, and liquid cooling technologies throughout APAC.

Liquid Cooling Gains Momentum

The rapid growth of AI and high-performance computing is also changing data center cooling requirements. While traditional air-based cooling remains widely used across APAC, liquid cooling is gaining traction because of its ability to efficiently manage higher rack densities while potentially reducing energy consumption.

In November 2025, Princeton Digital Group commenced construction of the JC3 data center campus in Jakarta, with its facilities designed to support both liquid and air-cooling solutions. Such developments demonstrate how operators are preparing their infrastructure for increasingly demanding workloads.

Liquid cooling adoption remains at an early stage across much of APAC. However, the expected increase in rack power densities is likely to accelerate adoption over the forecast period.

According to insights from NEXTDC, Vertiv, and NVIDIA, average data center rack densities could increase from approximately 15–25 kW to more than 50 kW by 2029. With AI workloads intensifying, peak rack densities could reach 250–500 kW, making conventional air cooling increasingly challenging and strengthening the business case for liquid cooling.

Government Initiatives Encourage Colocation Investments

Government policies are playing an increasingly important role in attracting data center investments throughout APAC. Countries are introducing tax incentives, investment support, infrastructure programs, and policies focused on AI, cloud computing, and digital transformation.

Malaysia is a notable example. In March 2025, the government established the Data Center Task Force (DCTF) to strengthen and regulate the country's data center industry. The task force is responsible for coordinating stakeholders, supporting policy development, and formulating strategic measures to encourage sustainable growth in the data center sector.

Similar initiatives across APAC are creating a more supportive investment environment and helping emerging markets compete for hyperscaler and colocation investments.

Sustainability and Infrastructure Trends in APAC Colocation

Sustainability is becoming an increasingly important consideration for data center operators and customers across the APAC region. Operators are adopting multiple strategies to reduce energy consumption and environmental impact.

These include:

  • Increasing the use of renewable energy
  • Replacing lead-acid UPS batteries with lithium-ion systems
  • Deploying HVO-powered generators instead of conventional diesel systems
  • Adopting liquid cooling for high-density workloads
  • Improving overall power usage efficiency
  • Developing energy-efficient and AI-ready facilities

The transition toward more efficient infrastructure is particularly important as AI increases the power and cooling requirements of data centers. Operators that can provide high-density capacity while maintaining energy efficiency are expected to gain a competitive advantage in the APAC colocation market.

Digital Realty, for instance, installed liquid-cooled servers at its SIN11 data center in Singapore, with the solution reducing power consumption by up to 29%. Such deployments highlight the increasing role of advanced cooling technologies in supporting the next generation of high-density computing.

APAC Data Center Colocation Market: Regional Outlook

China is expected to remain the largest APAC data center colocation market in terms of investment through 2031, followed by Japan, Australia, Malaysia, and India.

China

China continues to represent the largest colocation opportunity in APAC, supported by its extensive digital economy, large enterprise customer base, cloud adoption, and government-led digital infrastructure initiatives.

Major data center development is concentrated across provinces and cities including Fujian, Guangdong, Guizhou, Hainan, Hebei, Hunan, Ningxia, Shandong, and Shanghai. Meanwhile, Jiangsu, Anhui, Guangxi, Inner Mongolia, Sichuan, Shaanxi, and Zhejiang have gained momentum as emerging data center locations.

The country's large-scale provincial campuses are expected to remain an important feature of the APAC colocation landscape, particularly as operators seek locations with sufficient power, land, and connectivity.

Hong Kong

Tseung Kwan O remains one of Hong Kong's key data center clusters, attracting investments from major operators including SUNeVision Holdings, Digital Realty, Global Switch, and Telehouse.

Demand for cloud services, colocation, and digital infrastructure continues to support capacity expansion in the area, making Hong Kong an important connectivity and data center market within APAC.

Australia

Sydney and Melbourne remain Australia's primary data center development hubs. Leading operators such as Equinix, AirTrunk, NEXTDC, Global Switch, Digital Realty, and STACK Infrastructure continue to invest in new projects and capacity expansions.

Australia benefits from strong cloud adoption, a mature digital economy, and demand from hyperscalers and enterprises, supporting continued growth in colocation infrastructure.

New Zealand

Auckland is the leading data center development destination in New Zealand. The city benefits from its position as a major business hub and provides connectivity and low-latency infrastructure for digital services.

Other cities, including Christchurch, Hamilton, Invercargill, Palmerston North, and Wellington, have also gained momentum in data center development as digital infrastructure demand expands beyond Auckland.

Japan

Tokyo and Osaka remain Japan's primary data center markets. In 2025, operators including AT TOKYO, Colt Data Centre Services, Digital Edge, Equinix, IDC Frontier, MC Digital Realty, NTT Communications, Telehouse, and AirTrunk contributed to the expansion of data center capacity.

Japan's established digital ecosystem and strong enterprise demand make it one of the most important colocation markets in APAC.

India

India is emerging as one of the region's most attractive data center markets, supported by rapid digitalization, cloud adoption, enterprise demand, and increasing data localization requirements.

Mumbai, Navi Mumbai, Hyderabad, Chennai, and Pune are the preferred data center locations. Major colocation providers investing in the country include ST Telemedia Global Data Centres, NTT DATA, CtrlS, Equinix, Sify Technologies, and Airtel's Nxtra Data.

South Korea

Seoul remains the primary data center development hub in South Korea. However, development is increasingly spreading to cities and regions such as Incheon, Bucheon-si, Paju, Pohang, Daegu, Busan, Namyangju, Sejong, Goyang, Seongnam, Anyang, Gimhae, Cheonan, Daejeon, Cheongju, Gimpo, and Pyeongchon.

Government support for AI and digital transformation is expected to further strengthen demand for advanced data center infrastructure.

Taiwan

Taipei remains the preferred data center location in Taiwan, supported by strong enterprise connectivity and technology-sector demand. Major operators and investors include Keppel Data Centres, Epoch Digital, Chunghwa Telecom, Empyrion Digital, and SC Zeus Data Centers.

Taiwan's strategic importance in the semiconductor and technology industries is expected to support continued demand for data center capacity.

Singapore

Singapore remains one of the most established and strategically important data center markets in Southeast Asia. However, high development costs and limited land availability create significant constraints for new facilities.

Operators continue to explore industrial plots and redevelopment opportunities to add capacity, although the availability of suitable land remains limited. Singapore's strong connectivity and status as a regional business hub continue to support demand for premium colocation infrastructure.

Indonesia

Jakarta remains Indonesia's primary data center hub, supported by strong enterprise demand, cloud adoption, and digital transformation.

Major operators investing in the market include ST Telemedia Global Data Centres, EdgeConneX, Princeton Digital Group, NTT DATA, DAMAC Digital, and MettaDC.

Indonesia's large population, growing digital economy, and strategic position in Southeast Asia make the country an increasingly attractive destination for colocation investment.

Malaysia

Cyberjaya is Malaysia's most established data center cluster, benefiting from robust power infrastructure, connectivity, and government support.

The city hosts major operators such as AIMS Data Centre, Bridge Data Centres, Telekom Malaysia, and NTT DATA. Malaysia's competitive infrastructure environment and growing hyperscaler demand are supporting rapid expansion of the country's colocation sector.

Thailand

Thailand is becoming an increasingly attractive destination for data center investment because of its foreign ownership flexibility, access to energy and fiber infrastructure, and incentives available through the Eastern Economic Corridor (EEC).

Bangkok remains the country's preferred data center location, with investments from operators including ST Telemedia Global Data Centres, AIS Business (CSL), OneAsia Network, True IDC, Internet Thailand, Telehouse, and SUPERNAP Thailand.

Philippines

Manila remains the dominant data center hub in the Philippines and accounts for the country's largest concentration of operational facilities. Increasing cloud adoption and digital services are expected to support further colocation capacity growth.

Vietnam

Hanoi and Ho Chi Minh City are the leading data center markets in Vietnam. Hanoi currently accounts for the highest number of data center facilities, while both cities are benefiting from increasing digitalization, cloud adoption, and enterprise technology investments.

Competitive Landscape of the APAC Colocation Market

The APAC data center colocation market features a combination of large telecommunications companies, global data center operators, regional providers, and emerging infrastructure investors.

In 2025, key market participants included China Telecom, China Mobile, China Unicom, Equinix, GDS Services, Chindata Group, AirTrunk, VNET, NTT DATA, ST Telemedia Global Data Centres, Digital Realty, CDC Data Centres, SUNeVision Holdings, LG Uplus, NEXTDC, Shanghai Atrium, Nxera, CtrlS Datacenters, Keppel Data Centres, Sify Technologies, Telkom Indonesia, and DCI Indonesia.

In terms of colocation revenue, China Telecom led the APAC data center colocation market in 2025, followed by China Mobile, China Unicom, GDS Services, and Equinix. AirTrunk was also among the major players in the market.

At the same time, increasing customer demand from cloud service providers, enterprises, and public-sector organizations is attracting new investors. Emerging and new market participants include AM Green Group, Aqylon Nexus, AREA Group of Companies, Asia Pacific Land, BW Digital, Chinachem Group, CloudHQ, CURRENC Group, CyrusOne, Daewoo Engineering & Construction, DAMAC Digital, Data Center First, DC Connects, Doma Infrastructure Group, Diode Ventures, Endec, ESR, Everstone Group, Evolution Data Centres, FIR HILLS, FLOW Digital Infrastructure, FutureData, Global Telecommunications, GreenSquareDC, Haoyang Data, i-Berhad, Trifalga, and ZDATA Group.

The growing presence of these investors is expected to intensify competition for land, power, connectivity, customers, and strategic development opportunities across APAC.

What Lies Ahead for the APAC Data Center Colocation Market?

The APAC data center colocation market is expected to remain one of the fastest-growing digital infrastructure markets globally through 2031. The combination of AI adoption, cloud migration, digital transformation, edge computing, and growing data consumption is creating sustained demand for colocation capacity.

However, market expansion will also face challenges. Limited land availability in established markets such as Singapore, rising electricity costs, power availability constraints, sustainability requirements, and increasingly complex infrastructure needs could influence where new facilities are developed.

At the same time, emerging markets such as Malaysia, Indonesia, Thailand, Vietnam, and India are positioned to capture a greater share of future investment as operators seek locations with available land, power, connectivity, and favorable government policies.

The next phase of APAC data center development is therefore likely to be defined not only by the amount of capacity added but also by the ability of operators to deliver AI-ready, high-density, energy-efficient, and sustainable infrastructure.

Conclusion

The APAC data center colocation market is undergoing a structural transformation as digital economies mature and AI reshapes infrastructure requirements. With the market projected to grow from USD 27.19 billion in 2025 to USD 64.08 billion by 2031, the region presents substantial opportunities for colocation providers, hyperscalers, investors, and infrastructure developers.

China is expected to retain its leadership position, while Japan, Australia, India, Malaysia, Indonesia, and other Southeast Asian markets continue to attract significant investments. Meanwhile, emerging technologies such as liquid cooling, renewable energy integration, and high-density computing are redefining the design and operation of next-generation data centers.

For colocation providers and investors, success in APAC will increasingly depend on securing power, land, connectivity, sustainability capabilities, and AI-ready capacity in the right markets. As these factors converge, APAC is set to remain at the center of global data center investment through 2031.