Southeast Asia Data Center Construction Market Size, Share, Industry Analysis by Colocation Data Centers, Hyperscale Data Centers, and Enterprise Data Centers, Electrical Infrastructure, Mechanical Infrastructure, Cooling Systems, Tier Standards

Southeast Asia Data Center Construction Market – Industry Outlook & Forecast 2026-2031

SOUTHEAST ASIA DATA CENTER CONSTRUCTION MARKET SIZE

The Southeast Asia data center construction market size by investment was valued at USD 6.59 billion in 2025 and is expected to reach USD 17.65 billion by 2031, growing at a CAGR of 17.83% during the forecast period. The growing demand for data centers in Southeast Asia is fueled not only by AI and digitalization, but also by a wide range of other factors. Rapid increases in mobile usage and video streaming, along with the expansion of e-commerce and fintech, are significantly driving data consumption. At the same time, the rollout of 5G networks is accelerating the need for low-latency edge infrastructure.

Data center investments in Singapore had slowed down in recent years due to the moratorium on data center construction. However, after the lifting of the moratorium in 2022, the market has started receiving investments. Singapore has launched pilot projects to restart data center development, focusing on sustainability, energy efficiency, and controlled capacity growth after a temporary moratorium on new data centers.

Regulatory requirements such as data localization and disaster recovery are compelling organizations to host more capacity within the region. Additionally, multinational enterprises and hyperscalers are setting up local facilities to enhance performance and reliability. The rise of IoT, smart city initiatives, and latency-sensitive industrial applications is further contributing to sustained and diverse demand for distributed data center capacity.

The data center construction market in Southeast Asia is expected to garner a cumulative investment of $86.57 billion between 2026 and 2031, driven by the emergence of Malaysia, Indonesia, Thailand, and Singapore as promising investment destinations. Malaysia will contribute around $43.15 billion, representing around 50% of the overall share. The market provides exciting opportunities to investors looking to enter and invest in the market.

The average cost of data center construction in Southeast Asia can range from $7 million to $11 million per MW, depending on the location. These elevated costs are influenced by factors such as limited land availability, high labor rates, inflation, and access to power. Thus, operators continue to seek markets that offer comparatively lower construction costs, abundant power and land, as well as favorable regulatory environments, making these locations attractive for cost-efficient development.

Some of the leading colocation operators making significant investments include Bridge Data Centres, Digital Realty, Equinix, AirTrunk, NTT DATA, Princeton Digital Group, DayOne, ST Telemedia Global Data Centres, Vantage Data Centers, and others.

SOUTHEAST ASIA DATA CENTER CONSTRUCTION MARKET KEY TRENDS

Sustainability Initiatives and Renewable Energy

1. Data centers are heavy consumers of energy, contributing significantly to emissions. Nevertheless, the impact of these emissions can be reduced by transitioning to sustainable energy sources such as green hydrogen and solar power. Most of the data is currently being stored in data centers worldwide. It is estimated that data centers alone are likely to account for approximately 8% of the total energy consumption by 2030.
2. Indonesia aims to achieve its net-zero carbon emissions target by 2060; hence, it focuses on producing its electricity from renewable sources significantly. The country is committed to generating over 48% of its electricity through renewables by 2030. Furthermore, the country is making significant efforts to generate around 23% of electricity from renewable sources in 2025. In July 2025, NeutraDC partnered with Medco Power, a renewable energy developer, to deploy solar power at its data center facility in Batam, Indonesia.
3. Singapore aims to reduce its greenhouse gas emissions to around 60 million tons of CO₂ equivalent by 2030, to reach net-zero emissions by 2050. Under the Singapore Green Plan 2030, the key targets include increasing the adoption of renewable energy, enhancing energy efficiency across industries, transforming 80% of buildings into green structures by 2030, and deploying at least 2 GWp of solar energy by 2030. These initiatives reflect the strong commitment of Singapore to sustainability, energy transition, and climate resilience, which are in alignment with the global decarbonization goals.

Adoption of Liquid Cooling and Innovative Data Center Technologies

1. The rising demand for high-density computing, AI workloads, and edge deployments in Southeast Asia pushes data centers to adopt innovative technologies such as advanced cooling systems and next-gen generators. Hot and humid climates, coupled with increasing energy costs, make efficiency and sustainability quite critical. As uptime expectations grow, operators will invest in resilient infrastructure to meet the performance and environmental goals.
2. As AI workloads increase and rack power density rises, liquid cooling is likely to become essential for data center operators. For example, AirTrunk has implemented liquid cooling in the initial phase of its JHB1 campus in Malaysia, resulting in notable energy efficiency improvements. Also, in May 2025, Equinix JK1, situated in the Central Business District of Jakarta, integrated sustainability into its design by utilizing advanced technologies such as cooling arrays and liquid cooling systems.
3. YTL Data Center’s development in Johor, Malaysia, supported by partnerships within the AI ecosystem, including the NVIDIA-aligned AI infrastructure deployments, is being built with provisions for liquid cooling at scale. The site is promoted as a sustainable digital hub, powered by renewable energy sources to reduce the total operational emissions.

SEA DATA CENTER CONSTRUCTION MARKET SEGMENTATION INSIGHTS

1. The electrical infrastructure is witnessing several innovations in the UPS systems, generators, transfer switches & switchgears and other electrical equipment. Some of such innovations include HVO fuel for generator sets which reduces emission as a measure to curb emissions.
2. Additionally, several innovative UPS batteries such as Nickel-Zinc (NiZn) and Sodium-Ion batteries are gaining traction in the market due to their high power density, safety, sustainability, and other factors.
3. Liquid cooling is becoming a significant trend that major colocation operators are implementing in their data center facilities. It is emerging as a key differentiator for colocation providers as AI and compute-intensive workloads continue to grow. Companies like Equinix, Princeton Digital Group, Microsoft, and Bridge Data Centres are leading the way by offering scalable and energy-efficient solutions that can support the increasing demands of high-performance computing.

SEA DATA CENTER CONSTRUCTION MARKET GEOGRAPHICAL ANALYSIS

1. In Southeast Asia data center construction market, Malaysia is expected to be the largest market in 2031 in terms of power capacity, with a share of around 47% in 2031.
2. Several key drivers are propelling the growth of data centers in Malaysia. The strategic location of the country offers significant connectivity, allowing for efficient access to critical regional markets. This connectivity is enhanced by a well-developed infrastructure that supports seamless data transmission. Malaysia at present has 24 operating submarine cables, with an additional six of them slated for launch in the coming three to four years.
3. Indonesia emerges as a key player in the Southeast Asia data center market, showcasing substantial growth potential. The proactive digital transformation initiatives by the government, alongside the increasing implementation of AI technologies and growing submarine connectivity, drive significant investments in the data center infrastructure of the country. As of 2025, the construction cost of data centers in Indonesia ranged from $8 million to $9 million per MW, making it a more affordable option compared to other regional hubs such as Singapore and Malaysia.
4. In Thailand, the Thai Board of Investment (BOI) is committed to promoting key sectors, which include the development of clean energy solutions. They are at present establishing a Direct PPA, specifically for the data center industry, as well as refining digital regulations and laws to support the advancements in AI and digital technologies.
5. In the month of May-June of 2025, six new projects were approved by Thailand BOI with a cumulative investment of $3.6 billion (521.2 billion baht). Five among them are the new entrants to the Thailand market that include Galaxy Data Centers, Galaxy Peak Data Centers, ZDATA Technologies (Stratus Technologies), Vistas Technologies, and Digital Edge DC. The one existing investor is Bridge Data Centres.
6. The data center area addition in the Philippines is on a consistent growth trajectory. In 2025, the country witnessed a data center area addition of 185 thousand sq ft, and is expected to garner 2,260 thousand sq ft of area addition between 2026 and 2031.

SEA DATA CENTER CONSTRUCTION MARKET VENDOR LANDSCAPE

1. The Southeast Aisa data center construction market has the presence of key investors such as AirTrunk, Alibaba Cloud, AWS, Bridge Data Centres, DayOne, DCI Indonesia, Digital Edge DC, Digital Realty, Equinix, Google, Keppel Data Centres, Microsoft, Nxera, Princeton Digital Group, ST Telemedia Global Data Centres, Vantage Data Centers, YTL Data Center and others.
2. The Southeast Asia data center construction market continues to attract large-scale investments from major operators. For example, in June 2025, DayOne obtained more than $3.54 billion (RM15 billion) in new debt financing to enhance its operations in Malaysia's data center sector. The investment is aimed at bolstering the infrastructure of the company to meet the growing demands for data processing and storage services in the region.
3. New Entrants include A-FLOW, Beeinfotech PH, BRIGHT RAY, BW Digital, CloudHQ, CtrlS Datacenters, CURRENC Group, DAMAC Digital, Digital Halo, Doma Infrastructure Group, Epoch Digital, Evolution Data Centres, Galaxy Data Centers, Gaw Capital, Global Telecommunications, Haoyang Data, i-Berhad, Infinaxis Data Centre Holdings, Infracrowd Capital, NEXTDC, SC Zeus Data Centers, SEAX Global, Siagon Asset Management, STACK Infrastructure, TikTok, YCO Cloud, ZDATA Technologies and several others.
4. In Indonesia, Microsoft launched its first data center in May 2025 and is expected to contribute around $2.5 billion to the economy and create 60,000 jobs by 2028. In addition, it is also likely to support digital training for one million people, with 840,000 already participating in AI capability-building.
5. In June 2025, Equinix completed the acquisition of three data centers in Manila, Philippines, from Total Information Management (TIM), a prominent technology solutions provider, marking the official entry of the company into the Philippine market. The cost of the acquisition was around $180 million.