In the data centre market, an increasing number of groups are targeting Southeast Asia for investment and development opportunities.

The region, particularly Malaysia and Thailand, is emerging as an investment hotspot and is poised for further expansion in 2026, said CBRE in its latest Asia Pacific data centres outlook.

Malaysia is gaining traction as an offshoot of Singapore and also increasingly for local workloads as the government digitises the economy.

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In Thailand, the government is making it easier to build new data centres by improving access to power and land, as well as leveraging recent significant investment in subsea cable infrastructure.

Singapore’s two new tranches of data-centre development capacity, totalling 1.2 gigawatts (GW), will ensure that the city-state remains a premium high-quality hub for specialised AI workloads, while pushing larger requirements to neighbouring Southeast Asian countries, CBRE noted.

As for the broader Asia Pacific region, the real estate services firm expects Australia and Japan to lead demand this year.

Australia’s data centre market saw a strong 2025, with extremely aggressive infrastructure buildout by hyperscalers. Investment will likely be brisk, with a substantial pipeline of stabilised assets in Sydney and Melbourne, CBRE said.

Japan continues to witness rapid growth, following increased activity by Western developers and investors in Osaka in 2025. However, access to grid power remains the biggest constraint, and this challenge may intensify this year as data centre workloads shift to more intensive AI-driven demand.

CBRE reckons investors this year will ramp up deal sizes and strategies for both development projects and stabilised assets in Japan, with regional cities such as Fukuoka coming into play.

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In India, major global hyperscalers and domestic enterprises made significant investments and operational expansions in 2025. This trend is set to continue in 2026, with Hyderabad as a focal point.

While there is much of an AI investment bubble, such fears are largely confined to the US, in CBRE’s view.

“Data centre capacity oversupply is not a concern in Asia Pacific, where land and power availability continue to significantly lag demand,” it added.

In Asia Pacific, robust demand for both colocation and hyperscale data centres are expected to drive strong investor interest this year, especially when it comes to large-scale, AI-capable sites providing at least 100 megawatts of capacity, according to CBRE.

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