JPMorgan stated that there is still strong data center demand with some recalibration of supply in ASEAN, following a talk with DC Byte, world class data centre market intelligence provider to businesses.
In its research paper, JPMorgan stated that there is generally strong data centre demand across ASEAN, including ongoing builds in core markets. However, some recalibration of supply is occurring among US hyperscalers, potentially leading to smaller availability zones than planned and possible project delays in Johor and Jakarta. This recalibration, which has occurred every 2–3 years previously, may be due to the uncertain macroeconomic backdrop, a reassessment of supply versus demand growth, or changes in data centre designs. Despite this, the future demand environment is expected to remain robust, as most current capacity is not AI-related, and inference demand should drive infrastructure needs.
Singapore stands out, with lease rates remaining elevated at US$400/kW/month due to extremely low vacancy rates. In comparison, ASEAN lease rates are generally lower than US$100, with Johor specifically recorded between US$80–120. Malaysia offers a strong value proposition, with cost-efficient build costs around US$7 million per MW, compared to a regional cost of approximately US$10 million per MW.
While Kuala Lumpur builds provide a stable base for domestic and traditional enterprise workloads, Johor is evolving into Southeast Asia’s next AI-oriented hub, designed for scalability and hyperscaler deployment. Chinese demand remains strong there, evidenced by new RFPs and lease signings, following ByteDance’s announcement of development in Malaysia.
Incrementally more data centre builds are also observed in Thailand, boosted by major investments like TikTok’s announced US$8.8 billion and other activities such as STT GDC’s construction start and Alibaba Cloud’s second launch. GDS is also building a new campus due to strong demand from both US and Chinese customers, with increased activity in the Eastern Economic Corridor.
Thailand benefits from numerous industrial parks, sufficient energy and water, improving connectivity, relatively low utility costs, and faster project approvals. However, lease rates there could potentially decrease with the increase in builds, similar to the compression seen in Johor. Increased construction in Thailand could potentially benefit companies like GULF, GPSC, BGRIM, and industrial estate firms.
