DLR

The APAC sustainable data center market is projected to grow from USD 16.74 billion in 2025 to USD 57.18 billion by 2031 at a CAGR of 22.72%, driven by AI infrastructure and renewable energy investments. Major operators are deploying advanced cooling technologies, long-term power purchase agreements, and on-site renewables to support high-density workloads while addressing grid constraints and sustainability targets. However, challenges include coal-dependent energy grids and water scarcity across the region.

Indonesia's data center colocation market is projected to grow at 14.36% CAGR through 2031, driven by AI adoption, hyperscale cloud expansion, and enterprise digital transformation. The market is expanding beyond Jakarta to secondary cities like Bekasi, Karawang, Batam, and Surabaya, with operators investing in liquid cooling infrastructure and higher-capacity systems.

Utilized data center area is forecast to reach 8.01 million square feet by 2031, while rack capacity is expected to hit 198,000 units. Power availability remains a key constraint, though PLN is expanding grid infrastructure to support large-scale projects.

South Africa's data center colocation market is projected to grow at 12.09% CAGR through 2031, driven by cloud adoption, AI deployment, and enterprise digitalization. The market is expected to reach 2.07 million square feet of utilized area and 55.91 thousand rack units by 2031. Major operators including Teraco, Africa Data Centres, and Vantage Data Centers are expanding capacity, while power reliability and talent shortage remain key challenges.

Digital Realty announced the commencement of construction on KIX15, a new 24 MW data center at its KIX Campus in Osaka, Japan, scheduled to open in Q4 2028. The facility, developed through its 50/50 joint venture MC Digital Realty with Mitsubishi Corporation, will be the fifth data center at the campus and bring the joint venture's total portfolio to 10 data centers with approximately 220 MW of IT capacity. KIX15 is designed for high-density computing and advanced cooling to support AI infrastructure and hyperscaler demand in the Kansai region.

As AI computing demand surges, power availability has become the critical constraint replacing chip scarcity. Host Digital launched with long-term take-or-pay leases on energized sites in Oklahoma, while competitors like Vertiv, Cipher Digital, and Talen Energy are securing power infrastructure and contracted capacity. The shift reflects a fundamental change in data center economics where grid access and reliable power determine project viability.

Digital Realty's 2026 Global Data Insights Survey reveals that 59% of Asia Pacific respondents expect their companies to increase AI investment by 25% or more in 2026, exceeding the global average of 55%. However, AI adoption maturity varies significantly by market: Australia leads in realizing AI ROI (33%), Japan prioritizes regulatory compliance, Singapore faces infrastructure gaps, and South Korea emphasizes interconnection capabilities. The survey highlights that while 92% of APAC respondents align data location strategies with AI plans, only 22% report fully integrated hybrid infrastructure, indicating ongoing challenges in connecting distributed environments across the region.

Digital Realty's 2026 Global Data Insights Survey reveals that 59% of Asia Pacific enterprises plan to increase AI investment by over 25% in 2026. However, the region shows significant variations in converting investments to business value, with different markets prioritizing different needs: Australia leads in ROI realization (33%), Japan emphasizes compliance, Singapore focuses on infrastructure readiness, and Korea prioritizes data interconnectivity. The survey highlights that 92% of Asia Pacific respondents link data location strategy to AI plans, though only 22% have fully integrated hybrid infrastructure.