The data centre market in Southeast Asia (SEA) is growing significantly, with investments in Singapore, Indonesia, Malaysia, Vietnam, Cambodia and Thailand. The region is fast emerging as a hotspot for data centre players as enterprises rapidly deploy new-age technologies and adopt cloud-based services for operational efficiencies. Further, the onset of the Covid-19 pandemic seem to have fast-tracked the digital journey of enterprises. In addition, various other factors such as internet penetration, social media usage among consumers and digital transformation by enterprises across industries have been instrumental in promoting data centre growth. A look at some of the key drivers of the data centre industry in the SEA region, upcoming opportunities and the way forward…

Key drivers

Covid-19 pandemic

Ever since the outbreak of the Covid-19 pandemic and the onset of the work-from-home culture, there has been rapid uptake of remote working solutions and new-age technologies. Further, the pandemic-induced lockdown and restrictions imposed by government agencies across the region have also led to the uptake of internet-related services. As enterprises across sectors took the digital route to keep their businesses and operations afloat, the need and demand for data centres became even more pronounced.

Adoption of cloud-based services

Of late, enterprises in the region have been increasingly adopting cloud-based services. In fact, big tech giants like Google, AWS and Alibaba have shown increased interest in expanding their cloud business in the SEA region. Consequently, this is acting as a growth driver for the data centre market in the region. Further, growing internet penetration in the region is enabling both enterprises and consumers to deploy solutions based on new age technologies like artificial intelligence, internet of things, etc. The uptake of these technologies is consequently leading to a surge in the amount of data getting generated from various channels across networks.

Cybersecurity concerns

Cybersecurity concerns are yet another driver of data centre growth within SEA. As more and more data is getting generated by local and government-linked enterprises, which contribute a large proportion to local economies, the need to properly secure and store this data is also gaining prominence. Enterprises are increasingly moving to data centres to safeguard their data from malicious actors as well as to manage it efficiently.

Recent development in the region

Over the past few years, the SEA region has garnered a lot of interest from both big and small data centre players who are rushing to grab a share in the growing market. For instance, Equinix has announced the opening of its fifth data centre, SG5, in Singapore, a greenfield facility built with an initial investment of $144 million. In Indonesia too, the data centre space is bubbling with opportunities and, therefore, is seeing increased activity. Data Centre First, a Singapore-based company, unveiled that it would launch its maiden data centre in the Indonesian island of Batam in order to strengthen connectivity and digital links between Singapore and the area. The data centre operator announced the 30 MW data centre would be housed in the Nongsa Digital Park in Batam. Data Centre First will be the first international data centre operator to establish a presence on the island. Huawei is developing three data centres across Indonesia for Aesler and the two companies have already begun work on the first facility. The two parties aim to launch the first facility later in 2022.

Indonesia’s Edge Data Centre has secured credit facilities of up to IDR 2.7 trillion ($188 million) from PT Bank Central Asia Tbk. (BCA) to fund further expansion. In another major development, the Princeton Digital Group (PDG) has announced a new 22 MW data centre, Jakarta Cibitung 2 (JC2), with a total investment of $150 million, which will be built on a 19,550 square metre campus that houses PDG’s existing data centre, JC1. Upon completion, the expanded campus will offer 35 MW of capacity to serve global cloud companies, domestic internet companies, and enterprises, says PDG.

The Philippines too has made positive strides in building a robust data centre ecosystem in the country. DITO is planning to develop hyperscale data centres in the state. Further, Singapore-based, SpaceDC, has announced the launch of a new 72 MW data centre campus in the Philippines. In a first, SpaceDC says the campus will be fully powered by renewable energy in the form of wind and geothermal power. Chindata recently launched a new greenfield project in Johor, Malaysia, with a capacity of more than 80 MW ready to be delivered to its anchor clients in several phases starting 2022. Recently, YTL Data Centre Holdings Pte. Limited (YTL DC) announced the development of the first solar-powered data centre park in Johor, Malaysia.

The YTL Green Data Centre Park will offer diversity in power and connectivity on a large industrial site in the state, of which 275 acres will be dedicated to green data centre development. Upon completion, this solar-powered data centre park will achieve a total capacity of 500 MW. The first phase of 72 MW is currently under construction and is expected to provide services by the first quarter of 2024. Further, GDS Holdings Limited plans to develop a hyperscale data centre campus in Nusajaya, Johor, which is its first step to expand its platform into SEA. The data centre will have will have a total net floor area of about 22,500 square metres, with 54 MW of total IT power capacity.

Upcoming opportunities According to a recent study by Knight Frank, SEA is expected to see the maximum growth in the data centre segment within Asia Pacific. This is because, apart from Singapore, the remaining region is largely underdeveloped in terms of its data centre industry. As far as growth estimates are concerned, a recent report by Cushman and Wakefield predicts that the SEA region will be the fastest growing region for co-location data centres over the next five years, with its market size expanding at a compound annual growth rate of 13 per cent between 2019 and 2024. Similar estimates have been given by other research agencies too and Research and Markets predicts that the data centre market in SEA will be worth $11.63 billion by 2024. Most of this growth is expected to be in Singapore, Indonesia and Malaysia.


The increasing adoption of cloud solutions is creating significant growth opportunities for data centre market players. However, the shortage of land in Singapore, the need for high capex and opex for data centres, and the lack of strong subsea networks in the SEA region will challenge the growth of market participants.To make the most of the opportunities, market vendors should focus more on the growth prospects in the fast growing segments, while maintaining their positions in the slow growing segments. Overall, the outlook for the SEA data centre industry seems positive.With the middle-class demographic of the region growing rapidly and the consequent boom in technology and data consumption, the region is becoming a hotbed of opportunities for investors, infrastructure providers and solution providers, among others. However, effective materialisation of these opportunities would require that the state governments create a conducive environment by adopting growth-inducing policies for the sector