Beyond China: How APAC's Data Center Construction Market Is Growing Across the Region
The APAC data center construction market is experiencing strong growth as the region positions itself as one of the world’s largest digital hubs, supported by rising demand for cloud, artificial intelligence (AI), and digital services. China, Japan, Australia, and India remain among the region’s major data center markets, driven by digital transformation and technology investments. At the same time, countries such as Indonesia, Malaysia, Hong Kong, South Korea, Taiwan, Singapore, and Thailand are increasingly attracting operators through tax incentives and government support for digital infrastructure development.
According to Arizton recent research, the APAC data center construction market size is expected to reach USD 83.88 billion by 2031, growing at a CAGR of 15.87% during the forecast period.
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China Continues to Shape APAC’s Data Center Expansion
China remained the largest market in the APAC data center construction market in 2025, contributing over 41.81% of regional investments, equivalent to around USD 14.49 billion. The country also led in power capacity and hyperscale infrastructure, reinforcing its position as APAC’s largest digital infrastructure market.
What continues to strengthen China’s position is its lower data center construction cost, ranging between USD 6–6.5 per watt, making large-scale expansion more cost-effective than many APAC markets. Combined with rising enterprise demand and growing AI infrastructure investments, China remains one of the region’s most competitive markets for hyperscale and colocation operators.
India and Australia Emerge as APAC’s Strongest Growth Markets
India and Australia are among the largest data center markets after China, contributing around 12.39% and 12.16% of the APAC data center investments, respectively, in 2025. These nations are experiencing rapid growth in data center investments from domestic as well as global data center companies.
In India, state-level data center policies, infrastructure incentives, and data localization requirements continue to support expansion across Maharashtra, Tamil Nadu, Telangana, Karnataka, and Uttar Pradesh. Australia, meanwhile, benefits from strong submarine connectivity, with over 21 operational cables and 11 upcoming systems, while Sydney and Melbourne continue attracting investments from major hyperscale and colocation operators.
Japan And Singapore are Among the Most Expensive Markets
Japan accounted for around 7.68% of APAC data center investments in 2025, remaining one of the region’s most strategic markets despite higher data center construction costs, which stood at around USD 15 per watt.
While costs remain higher than much of APAC, Japan continues to attract investments due to strong enterprise demand and long-term government commitments toward AI infrastructure and digital transformation. The government’s plan to invest around USD 65 billion in AI infrastructure by 2030, combined with sustainability and carbon reduction targets, continues to shape long-term investment decisions in the market.
Hong Kong Maintains Its Strategic Gateway Role in APAC
Hong Kong serves as a gateway to China, owing to the country’s strategic location and digital connectivity with China. Hong Kong resulted in generating over 1.83% of the overall investments in the APAC data center construction market in 2025.
Tseung Kwan O continues to attract expansion from major operators, while Hong Kong’s proximity to mainland China and strong international trade connectivity continue to strengthen its role as a strategic regional gateway.
Singapore’s Supply Limits Are Accelerating Johor’s Growth Story
Singapore continues to remain one of APAC’s leading data center and colocation hubs, with 45 operational facilities as of 2025. However, land and power constraints are increasingly limiting large-scale expansion opportunities within the country.
This is creating stronger momentum in Malaysia, particularly Johor, where growing hyperscale demand and the Johor–Singapore Special Economic Zone (JS-SEZ) are supporting new development activity. While Singapore remains the region’s connectivity and operations hub, future hyperscale data center expansion is increasingly moving across the border.
What This Means for the APAC Market
Beneath APAC’s strong growth story, several distinct market shifts are taking shape. China continues to lead through scale and cost advantages, while India and Australia are emerging as key expansion markets supported by policy, connectivity, and rising enterprise demand. At the same time, Singapore’s supply limitations are strengthening Johor’s position as a fast-growing alternative for hyperscale development, while Japan and Hong Kong continue to offer long-term strategic value for operators focused on premium infrastructure and regional connectivity.
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Founded in 2017, Arizton Advisory & Intelligence delivers data-driven market research and strategic consulting that empowers clients to make informed decisions and drive growth. Combining quantitative and qualitative insights, we provide in-depth analysis across industries including Agriculture, Consumer Goods, Technology, Automotive, Healthcare, Data Centers, and Logistics. Recognized by top-tier media, our expert team transforms complex market data into actionable strategies, helping clients anticipate trends, seize opportunities, and stay ahead of the competition.