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.

While M&A activity dominates the headlines, asset-level deals are also on the rise. In the third quarter of 2024, investment in APAC data centers surged 114% year-on-year to $2.8 billion, according to JLL’s Capital Tracker.

A prime example was the KRW 734 billion sale of Hanam Data Center by IGIS Asset Management, which marked the first-ever sale of a stabilized data center, or a fully pre-committed and operational data center, in South Korea.

“Asset-level trades like this are rarer as data center operators typically prefer to own and develop their own data centers,” says Bob Tan, Executive Director, Capital Markets Transactions, JLL. "However, in markets like Japan and Korea, enterprising investors have been quite successful in securing the land, power, and end-users, making asset-level deals more common at this moment."

The underlying factor driving increased deal activity, whether it’s individual asset deals or large-scale M&A, is the robust demand from consumers, cloud service providers, and artificial intelligence, Tan says.

Limited asset availability, coupled with favorable market conditions, has also contributed to the surge in activity.