The Asia-Pacific (APAC) data center market is scaling at an unprecedented pace, and the acceleration is generating significant M&A deal flow opportunity in digital infrastructure.
In the first quarter of 2026 alone, M&A value for data center deals reached nearly US$16.5 billion. This is almost 50 percent higher than the full-year total for 2025 (US$11.1 billion) and puts the market on course to surpass the US$22.5 billion recorded in 2024, a year defined by the US$13.5 billion Blackstone-led acquisition of Australia-based data center operator AirTrunk. At the time of writing (June 16), US$1.5 billion in transactions had been announced in Q2, nearly tripling the output recorded in the same quarter last year (US$572 million). The figure also exceeds Q2 2024’s total (US$1.4 billion).
The pipeline behind those numbers is just as compelling. Real estate services company Cushman & Wakefield expects total operational and pipeline data center capacity across the APAC market to exceed 33,000 MW by 2030, overtaking the US as the world’s largest market for co-location data centers, in which operators lease space and power to multiple tenants.
Several structural forces are converging to sustain that trajectory over the medium to long term. APAC leads the world in workforce adoption of AI tools, driving up demand for AI computing capacity. Likewise, data sovereignty is now a matter of national security requiring investment in local infrastructure rather than relying on offshore capacity. Demand for cloud computing and Internet of Things technology continues to compound on top of those factors.
Ideal conditions for dealmaking
Against a backdrop of geopolitical tension and macroeconomic uncertainty, data centers have emerged as a dealmaker favorite. The result has been a run of megadeals across the region.
The largest deal so far in 2026 was the KKR-led US$5.2 billion deal for Singapore-based data center operator STT GDC, backed by a consortium that includes Singapore Telecommunications. The deal gives the data center operator an implied enterprise value of around US$10.8 billion and underscores the willingness of dealmakers to pay up for platform assets with regional reach.
M&A investment is also flowing into earlier-stage growth stories. DayOne Data Centers, another Singapore-based operator, raised more than US$2 billion in a Series C round led by Coatue Management and Hillhouse Investment. The proceeds will finance the company’s ongoing expansion in Singapore, Malaysia, Indonesia, Thailand, Japan, Hong Kong, Finland and Spain.
China is generating its own deal activity. Xiantian Computing, backed by investment company Henan Investment Group, acquired data center group Heying Data in a US$1.4 billion deal announced in February, while Huatai Capital Investment took a stake in GDS Holdings, a data center operator and developer, in a US$299.8 million deal earlier in January.
Japan, meanwhile, is emerging as a market of institutional scale. In April, real estate investment trust CapitaLand took a 49 percent stake in an Osaka hyperscale data center in a deal worth US$982 million—the largest data center deal in Japanese history. The deal exemplifies the rapid growth and maturity of the APAC data center industry. According to real estate firm JLL, which advised on the Osaka deal, the APAC market is now moving into a phase of “capital recycling.” Huge amounts of liquidity are flowing into the industry, as projects make the shift from construction and development into high-quality, operational assets.
Power plays add complexity
The single biggest constraint facing the APAC data center market is not capital, regulation or even geopolitics—it is power supply. Estimates show that by 2030, data centers could consume up to 2.3 percent of regional electricity output, the highest share in the world outside of the US, according to Deloitte research. That represents a five-fold increase in power demand, from less than 200 TWh in 2025 to more than 1,000 TWh by the mid-2030s.
For dealmakers, the energy equation is becoming impossible to separate from deal rationales. Commitments to decarbonize power supply, and an expected increase in electricity consumption from 320 TWh in 2024 to 780 TWh by 2030, are already stretching grid capacity in key markets. Energy stability remains a politically sensitive issue, and APAC governments have previously imposed moratoria on new data center construction. For instance, Singapore blocked new data center builds between 2019 and 2022 because of climate and energy supply concerns, and Taiwan suspended new construction in Taoyuan in 2024.
Finding a balance
Governments across APAC, however, recognize that data centers are essential infrastructure, acting as engines of economic growth, AI development and technological competitiveness. Many nations are eager to encourage investment, as long as sufficient safeguards are in place.
Singapore is the clearest example. Having lifted its moratorium on new builds, the city-state has reopened the door to data center investment but attached strict environmental and energy efficiency safeguards to new projects. This can broaden opportunities for data center dealmakers to implement a wider mix of energy sources, strengthen supply resilience and bring down energy costs.
That regulatory direction is reshaping how deals get structured. Power purchase agreements, which lock in fixed energy costs over 20- to 25-year contracts, are becoming a core component of transaction planning and help to secure supply and forecast long-term energy costs in choppy energy markets. Likewise, selecting data center assets in locations best placed to harness wind and solar power not only helps to appease regulators but also secures the cleanest, cheapest energy supply available. And deploying the most efficient chips and cooling systems brings down operating costs, while also reducing consumption and emissions, marking an area where sustainability and commercial incentives pull in the same direction.
There are also regulatory incentives for data centers that go green. The Singaporean framework, for example, includes provisions that allocate more grid capacity to projects that meet sustainability benchmarks. In the next phase of APAC data center development, access to reliable low-carbon power may become as strategically valuable as the computing power of the assets themselves.
Energy supply may pose the single biggest bottleneck for data center development in APAC, but it also offers the industry one of its most attractive opportunities.
Outlook
APAC’s data center market has reached an inflection point. Deal values are scaling rapidly, and investment is pouring in from multiple directions and various dealmakers. The structural tailwinds at play—AI adoption, data sovereignty mandates and cloud migration—will only intensify in the short and medium term.
The winners in this next phase will not be the dealmakers who move fastest, but the ones who can navigate the region’s power constraints while also appeasing increasingly demanding policymakers and regulatory environments. Building or buying assets designed for long-term energy efficiency from the ground up will also be key to dealmaking strategies.
