A frenzy of mergers and acquisitions is sweeping the Asia-Pacific data center market, driven by strong demand and limited availability.

Recent high-profile deals include Blackstone’s AU$24 billion ($16 billion) acquisition of Australian data center platform AirTrunk — the largest-ever data center company deal — and DigitalBridge’s acquisition of Yondr Group, a global developer and operator of hyperscale data centers.

The flurry of deals comes at an inflection point when data centers in the region are reaching operational status.

“We’re nearing the tail end of a wave of land acquisition and construction,” says Tan. “Operators and investors will soon need to decide on the optimal strategy to maximize the value of their new assets, which could lead to more M&A or joint ventures.”

The robust fundamentals of the APAC market make it a prime investment destination. While still relatively nascent compared to more mature data center markets, the region is experiencing rapid growth.

In Southeast Asia, for instance, the sizable domestic markets, rising mobile penetration, and the soaring demand for cloud services are creating unprecedented demand for data centers.

“The APAC data center market is still considerably underdeveloped and underserved compared to the Americas and Europe,” says Celina Chua, Data Center Client Solutions Director, Capital Markets, Asia Pacific, JLL. “The implementation of data localization laws in some markets is also accelerating the development of local data centers.”

In more established markets like Japan and Australia, government-led digital transformation initiatives are further driving demand.