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[SINGAPORE] Johor is the fastest-growing data centre hub in South-east Asia, with aggregate supply nearly doubling in the past year, said Knight Frank.

In a regional data centre report released on Wednesday (Sep 10), the real estate consultancy also noted that the Asia-Pacific had a 160 per cent increase in new project announcements in the first half of 2025.

The 13 gigawatts (GW) of stated capacity is more than double the 5 GW declared in the year-ago period. The funding needed for these projects has exceeded US$180 billion so far this year, with US$160 billion committed by major technology companies Microsoft, Amazon, Google and Meta.

Knight Frank said Singapore’s “strict planning controls” have resulted in global tech firms looking north instead. Johor has emerged as the “top alternative” due to its proximity to the city-state and strong connectivity.

Johor supply rising, but higher electricity prices loom

In the last 12 months, Johor’s aggregate supply nearly doubled to 5.8 GW, inclusive of 2 GW of new project announcements. This growth was backed by “strong government support” and the roll-out of national data centre planning guidelines.

The state recorded 260 megawatts (MW) of take-up in H1 2025, with social media accounting for 61 per cent of that demand, and the rest driven by artificial intelligence.

The report noted that customer demand has also reshaped delivery timelines, with many Chinese clients requiring construction times of nine to 11 months. Prefabricated builds have thus become “more prevalent”. Meanwhile, the market is highly constrained, with a vacancy rate of just 1.1 per cent.

“Land parcels in major tech parks are now scarce, and the next phases of these parks are already being booked,” Knight Frank said.

It also cautioned that costs could rise 10 to 14 per cent due to new power tariffs on data centres, which Malaysia implemented in July. Johor charges US$0.135 per kilowatt-hour (kWh) of electricity, compared with Singapore’s rate of US$0.239 per kWh.

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Major data centre projects and investments in Johor include Microsoft’s acquisition of a six million-square-foot (sq ft) site for US$147 million, as well as ZData’s US$55.9 million purchase of a 1.7 million sq ft land parcel.

In February, Blackstone-owned AirTrunk said it would build a second facility in Johor that will add 270 MW of capacity. Last November, Bridge Data Centres announced a 400 MW power agreement.

Microsoft has the largest potential share of capacity at 600 MW, if fully built out. Meanwhile, Bridge Data Centres and DayOne combined manage 58 per cent of the market’s built capacity, and oversee 17 per cent and 24 per cent, respectively, of the capacity under construction.

“These two players are performing well due to affordable and faster builds, as they can leverage Chinese supply chain mechanisms,” said Knight Frank.

Singapore expansion remains “constrained”

In Singapore, total data centre capacity expanded 5.2 per cent in H1 2025 to 1.6 GW. During that period, 48 MW of new projects were brought online, bringing the live capacity to 1.1 GW.

Over H1, Singapore transacted 28.1 MW of capacity across three deals. It remained the most expensive colocation market in the Asia-Pacific in the period, said Knight Frank.

A colocation data centre is a third party-operated facility, where businesses lease space and share power, cooling, security and network connectivity costs, as provided by the operator. Colocation supply in Singapore has a 4 per cent vacancy, with 28.1 MW of available capacity across 15 sites.

The report also pointed out that customer churn continued in H1, as banks moved their bases from Hong Kong to Singapore amid political tensions.

At least 200 MW of new data centre capacity in Singapore is set to be rewarded, Knight Frank said, citing a second “call from applications” by the Economic Development Board and Infocomm Media Development Authority in the third quarter of 2025.

The new capacity will be awarded in 20 MW tranches, with power usage effectiveness (PUE) and “brown-to-green” energy ratio requirements. The Republic requires new data centres to have a PUE of 1.3 or lower to meet sustainability targets.

Successful applicants will be announced in Q1 2026, with operations expected to start in 2029. Singapore’s pilot call for applications, in 2023, led to 80 MW of capacity awarded to four operators.

Notable recent activity in the city-state include Keppel Data Centres’ planned 21 MW expansion, and AirTrunk’s S$2.3 billion green loan for its 80.2 MW greenfield project, the report said.

It also noted that DayOne, which was one of the awardees in the pilot exercise, broke ground on its 20 MW development at the start of Q3.

“Demand continues to exceed supply, as 90.2 per cent of under-construction capacity has already been pre-leased,” Knight Frank said.

Google leads the market with a 17 per cent share of built capacity. Colocation providers ST Telemedia Global Data Centres, Equinix, Digital Realty, AirTrunk and Singtel account for a 40 per cent share in total.

At 8.3 MW over two sites, Singtel has the largest share of data centre capacity under construction.

In terms of the development pipeline, Google, Meta and AirTrunk collectively hold 66 per cent of the capacity across both committed and early-stage projects. However, this is expected to change as more power is “drip-fed” to the market, said Knight Frank.

Despite the recent and planned growth, data centre expansion in Singapore remains “constrained”. The city-state has one of the smallest development pipelines in the region, at about 537 MW.

These findings echo those in a PwC report in August, which noted that, out of 14 Asia-Pacific markets, Singapore’s data centre capacity will likely have the lowest compound annual growth rate.

This is due to land limitations and policies supporting green data centres in the Republic, the report said.