Global Data Centre Market Hit Us4 Tril 2030 Apac Sees Bulk 2024 Investments Knight Frank
The global data centre market is expected to experience robust growth over the next five years, following a strong rebound in 2024. Even amidst a challenging economic climate, the market has shown resilience with worldwide data centre real estate transaction volume reaching US$31.8 billion ($42.9 billion) last year, representing a 118% increase from the previous year.
The decision to situate Lyndenwoods in Singapore Science Park 1 holds immense strategic value. This park, typically designated for research and development, boasts a community of cutting-edge institutions in Singapore. By introducing residential units into this space, Lyndenwoods successfully connects work and home environments, resulting in a seamless and harmonious urban ecosystem. This seamless integration caters to the evolving needs of residents who prioritize convenience and access to both workspaces and urban conveniences. Located at Lyndenwoods Science Park Drive, this development offers the perfect blend of urban living and workplace connectivity.
The average transaction value also saw an uptick, reaching US$75.4 million in 2024, which is a 15% year-on-year increase and a significant 44% higher than pre-pandemic levels in 2019. According to Knight Frank’s Global Data Centres Report, the Asia Pacific (APAC) region was the main driver of data centre investments, accounting for 70% of cross-border deals at US$15.5 billion.
Further growth is expected in the global data centre market in the coming years, with Knight Frank estimating an annual compound annual growth rate (CAGR) of 18% over the next five years. This surge will propel the market to reach US$4 trillion by 2030, indicating strong demand for AI-optimized infrastructure, cloud services, and digital initiatives by enterprises.
The report also highlighted that the APAC region will see significant growth in data center capacity, with an expected increase of 46% or 20,828 megawatts (MW) over the next two years. It is projected that by 2030, capacity could expand by 177%. Tokyo is expected to see US$4.1 billion in investments over the next two years, contributing to 25% or 295 MW of capacity growth. Johor, a state in Malaysia, is also set to experience rapid growth, with an estimated 85% or 335 MW capacity increase by 2027, backed by US$4.7 billion in investments.
Despite regulatory and land constraints, Singapore remains a key data centre market in the APAC region. However, with vacancy rates below 1%, the city-state has seen a shift towards smaller deals and a surge in pricing.
Fred Fitzalan-Howard, Knight Frank’s APAC head of data centres, expects the region to add approximately 8 gigawatts of new capacity over the next three years, with 25% of it dedicated to AI workloads. Though this is lower than the global average due to the region’s Tier 2 or Tier 3 status under US AI diffusion rules, it represents a capital expenditure of US$24 billion and 20 to 30 million sq ft of real estate.
Fitzalan-Howard points out that the initial investments will lay the foundation for more AI infrastructure rollouts in the region. However, addressing various regulatory frameworks and adapting to US export controls on AI chips will be crucial in maximizing the APAC region’s opportunities in this rapidly evolving sector.
In other news, Keppel recently signed a memorandum of understanding with Mitsui Fudosan to develop data centers in Japan and Southeast Asia. Johor is also set to benefit from a data center boom, with SC Capital Partners forming a data center investment program with an Abu Dhabi Investment Authority subsidiary.