Global data centre market to hit US$4 tril by 2030; Apac sees bulk of 2024 investments: Knight Frank

The global data centre market is set to see rapid growth in the next five years, following a strong rebound in 2024. According to Knight Frank’s latest Global Data Centres Report, worldwide data centre real estate transaction volume bounced back from an interest rate-hike driven slump in 2023 to hit US$31.8 billion ($42.9 billion) last year, up 118% y-o-y. 

Global transaction values averaged US$75.4 million in 2024, up 15% y-o-y and 44% higher than pre-Covid levels in 2019. Knight Frank’s research also found that Asia Pacific (Apac) dominated data centre investments, with some US$15.5 billion, or 70%, of cross-border data centre deals taking place in the region.

The surge in global data centre market activity is expected to continue in the coming years. Knight Frank estimates that the market will notch an annual CAGR of 18% over the next five years, propelling it to hit US$4 trillion by 2030. 

The buoyant outlook reflects mounting demand for AI-optimised infrastructure, cloud services and enterprise digital initiatives. Knight Frank projects that global data centre capacity will spike 46%, or 20,828 megawatts (MW), over the next two years. By 2030, it predicts capacity could expand by 177%.

Apac is expected to add 4,174 MW of capacity by 2027, supported by US$58.7 billion in planned investments over the same period. Key contributors include Tokyo, which is projected to see US$4.1 billion in investments over the next two years that will underpin 25% (295 MW) of capacity growth. 

Johor is also on track for further rapid growth. Knight Frank estimates the southern Malaysian state will see 85% (335 MW) capacity growth by 2027, backed by US$4.7 billion in investment. 

Across the causeway, Singapore remains a key data centre market despite regulatory and land constraints. However, the report highlights that with vacant rates below 1%,  transactions in the city-state have shifted towards smaller deals, in tandem with a surge in pricing.

Fred Fitzalan-Howard, Knight Frank’s Apac head of data centres, says that the Apac data centre market will add about 8 gigawatts of new capacity over the next three years, with a quarter of this dedicated to AI workloads. While lower than the global average due to the region’s Tier 2 or Tier 3 status under US AI diffusion rules, the pipeline represents US$24 billion in capital expenditure and 20 to 30 million sq ft of real estate, he adds.

Fitzalan-Howard sees the initial investments as laying the foundation for more AI infrastructure rollouts in the region. “However, addressing varied regulatory frameworks and adapting to US export controls on AI chips remain essential factors in maximising Apac’s opportunities in this rapidly evolving sector,” he continues.