Savills: Expected data center supply in the Asia-Pacific region to double in the next three years.

According to the latest report from CBRE, driven by the trend of artificial intelligence (AI) and digital transformation across industries, the demand for data centers in Hong Kong remains strong. The company predicts that the supply of data centers in the Asia-Pacific region will double in the next three years, but due to limited power supply and lack of infrastructure to support AI, the region is expected to face a power shortage of 15 to 25 megawatts by 2028. Shin-Wen Lee, Executive Director and Head of Industrial and Logistics at CBRE Hong Kong, stated that Hong Kong, as an important gateway for data center traffic in the Asia-Pacific region, continues to attract investment due to its resilience and strategic location, despite facing rising costs and infrastructure limitations. The company expects sustained demand, particularly from AI and cloud service providers, to lead the next wave of development. Lee added that the current demand for data centers mainly comes from IT service providers, e-commerce platforms, and banks in mainland China and Hong Kong. As available space in the Singapore market is limited, some Singapore tenants are considering Hong Kong as an alternative. The Asia-Pacific region is also facing wider and similar challenges. Joanne Tsai, Head of Research at CBRE Asia Pacific, stated that in the foreseeable future, the flourishing development of AI, coupled with market demand for cloud services, will continue to drive strong demand for server hosting and hyperscale data centers in the Asia-Pacific region, attracting significant interest from investors. It is expected that demand in mature markets such as Japan, Australia, and South Korea will continue to grow, with Singapore being closely watched despite limited supply. The company pointed out that the rapid proliferation of AI and cloud services is driving the demand for the next generation of data centers, but many existing and upcoming data centers are not specifically designed to support AI workloads. These AI-focused data centers require server rack power densities of more than double, as well as advanced cooling systems, structural reinforcement, and low-latency network connections, presenting significant challenges for developers.