Investment in APAC’s data center market is on a steep upward trajectory, providing lenders in the region with a full pipeline of compelling opportunities to deploy capital.
Demand across the region is being driven by 5G capacity, cloud computing, digital content, AI development and the adoption of the internet of things.
According to Cushman & Wakefield, APAC data center capacity reached 12.2GW by the end of 2024, with a further 14.4GW planned or under construction. They also forecast Asia’s data center market will grow 32% annually through 2028—nearly double the US growth rate of 18%.
These strong fundamentals are supporting rising occupancy rates and stable rental yields, which in turn are fueling significant M&A activity. TMT Finance reports a 63% year-on-year increase in M&A volume in the first half of 2025 and an 8% rise in deal value.
Lenders flock to data centers
This positive outlook means that data center investors—including hyperscalers and co-location operators—have numerous options when seeking debt for M&A and new builds.
Recent deals include Vantage Data Centers’ acquisition of Yondr Group’s data center campus in Malaysia, part of Vantage’s US$1.6 billion APAC expansion plan; Keppel DC REIT’s US$551 million acquisition of a new data center in Tokyo; and BDx Data Centers’ debt package led by Clifford Capital, United Overseas Bank, and SMBC to fund Hong Kong’s first hyperscale facility.
A typical APAC data center financing cycle sees a private developer, often private equity–backed, raise a full-recourse, senior-secured package to fund permitting and land acquisition. Once contracts with hyperscalers or co-location tenants are signed and future cashflows secured, these loans are typically refinanced into cheaper, limited-recourse project facilities. These facilities increasingly use a cashflow based project finance structure rather than a traditional loan-to-value based real estate finance model.
Flexibility and innovation
To win mandates in this competitive market, lenders are offering flexible and innovative structures. Increasingly, they are willing to pre-commit substantial debt facilities upfront, giving developers access to capital pools that cover entire portfolios rather than individual projects.
This approach addresses the sector’s biggest bottleneck—access to capital—and provides certainty for developers to advance projects as soon as they are viable. With financing lines in place, developers can move quickly when sites and permits become available, without waiting for lengthy credit committee approvals. The ability to deliver speed to market is now a critical advantage for both developers and their lending partners.
Going green to get deals done
Lenders are also expanding their exposure by offering green and ESG-linked loans, addressing concerns over the sector’s heavy power and water usage.
Singapore’s three-year moratorium on new data centers between 2019 and 2022 underscored these risks. The country has since launched a “Green Data Centre Roadmap,” allocating additional grid capacity only to projects that meet energy-efficiency and renewable-power benchmarks.
Developers are responding. Blackstone-backed AirTrunk is raising a US$1.7 billion green loan for a new Singapore facility, while also pursuing a US$2.8 billion sustainability-linked facility to support projects in Malaysia, Singapore and Hong Kong.
In a market that is both competitive and environmentally sensitive, lenders able to tailor financing to commercial requirements while supporting greener infrastructure will be well positioned to win mandates. APAC’s data center boom is not only reshaping regional financing practices but is also setting benchmarks that may influence global markets.
