SOUTHEAST ASIA OUTLOOK 2025

Southeast Asia Outlook 2025: Long-Term Growth Prospects Remain Intact

KEY THEMES Data centres boom

Operational Capacity Per Population, Selected Major Markets (people per MW < 100,000)

100,000

2024 was a year of significant growth and investment in data centers, particularly in Southeast Asia. The region saw huge investments in the sector, driven by the increasing demand for digital infrastructure and cloud services. Data Centre investments, led by Singapore, Malaysia and Indonesia, surged to US$3.2 billion in 2024 – a stark increase to more than four times of sales volume during the previous year, representing around 40% of total SEA industrial volumes in 2024. Driving investment sales demand were both investors and data center operators. On the investment front, Blackstone’s acquisition of AirTrunk, has demonstrated investors’ confidence in the long-term outlook of the sector. Data center operator activity was robust as well with colocation providers expanding their presence in several markets on the back of announcements by several hyperscalers to invest in cloud infrastructure in the region. Aside from Singapore, Johor, Bangkok and Jakarta are emerging as strategic hubs for hyperscalers in Southeast Asia, boasting a diverse ecosystem of major players and a robust pipeline of investments.

Despite the recent surge in data centre investments and development, the data centre market in emerging Southeast Asia remains underserved, presenting opportunities for further growth and investment. According to Cushman & Wakefield’s Asia Pacific Data Centre Construction Cost Guide 2025, an analysis of operational data centre power per capita shows a sharp difference across Asia Pacific and key data centre markets globally. Notwithstanding the strong demand for data centres, challenges such as power and water availability, which are key requirements for data centre development, continue to persist. Consequently, these constraints have shaped investment trends, with powered land commanding a price premium and driving interest for potential brownfield redevelopment sites that have already secured power.

80,000

60,000

40,000

People per MW

20,000

-

Japan South Korea New Zealand United Kingdom

Australia United States Hong Kong SAR

Singapore

Source: Cushman & Wakefield’s Asia Pacific Data Centre Construction Cost Guide 2025

Favourable long term prospects for factories and logistics assets

Aside from data centres, industrial investments in SEA have continued to grow given an anticipation of higher manufacturing and exports in the region. There is deep institutional liquidity for industrial assets as seen from the US$1.2 billion acquisition of seven industrial properties in Soilbuild Business Space REIT by a joint venture (JV) between private equity firm Warburg Pincus and Australia listed Lendlease Group. The portfolio totaled 4.5 million sqft of business parks and specialist facilities across life sciences, technology, advanced manufacturing, and logistics. E-commerce demand continues to expand, albeit it has moderated slightly due to a shift in consumer spending from goods to services. Nonetheless, the long term outlook for e-commerce remains optimistic, and this will drive continued demand for prime logistics. According to the World Economic Forum, SEA’s digital economy is projected to reach US$1 trillion by 2030, almost four times the US$263 billion achieved in 2024 in terms of GMV (the total value of goods sold between customers or from e-commerce platforms). Against this backdrop, an ample supply pipeline of new industrial stock has increased to cater to an anticipation of higher industrial demand. However, the fluid global trade environment has given rise to near-term mismatches in supply and demand, prompting some asset owners to incorporate flexibility into their new developments. In Vietnam, some industrial owners are adapting to slower warehouse demand by converting their properties into factory spaces. Over time, the growing supply of assets in Southeast Asia is likely to draw more institutional investment, as such investors generally seek opportunities that meet a certain scale threshold.

Operational Capacity Per Population, Selected Emerging Southeast Asia Markets (people per MW >100,000)

2,000,000

1,600,000

1,200,000

800,000

People per MW

400,000

-

Vietnam Philippines

Thailand

Indonesia

Malaysia

Source: Cushman & Wakefield’s Asia Pacific Data Centre Construction Cost Guide 2025

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