“Investors continue to explore opportunities to build scale in this sector, with both joint ventures and M&A activity increasing substantially over the past 24 months.”
Data centres are only starting to emerge as a “developed, mature asset class”, says Greg Hyland, CBRE’s head of capital markets in Apac. “When you compare it to offices, which have been sort of institutionalised for the last 60, 70 years, the installed base of available product is a lot higher. I think data centres are really going through a construction phase at the moment. As you get more installed capacity, that interest will increase.”
A lot of money has gone into the development of new data centres, says Hyland at a Feb 3 media briefing. “There are a few major regional hubs, and each country does have their own sort of characteristics, but we’ve seen a lot of the activity being concentrated around Japan, Johor [in Malaysia] and Australia.”
See also: Construction costs overtake geopolitical concerns for real estate investors: CBRE survey
Citing conversations with clients, Hyland says “a lot of money [has been] raised and allocated to the sector”, and “a lot of capacity” is expected to come online. “Now, how that capacity is absorbed is still probably the question that a lot of people are asking at the moment.”
That said, Hyland notes strong pre-leasing even before data centres are completed. This is a necessary move to mitigate risks as building a 20-megawatt (MW) data centre can cost around US$400 million ($505 million) to US$500 million, he adds.
“Some of these campuses are now 100MW, 200MW or 300MW… But again, some of the projections around how much of this capacity is going to come online are quite huge. Whether it all gets built — it’s probably to be determined,” says Hyland in response to City & Country.
See also: Mega-what? Capex, depreciation could rise as data centres focus on AI
Who are these investors with deep pockets and are willing to shoulder substantial amounts of capital expenditure (capex)?
According to Hyland, these are the “larger pension plans [and] insurance companies that have long-dated liabilities”.
Despite the high cost, development margins “have been quite robust”, Hyland adds. “So far today, some of these assets are finished and how they’re going to be owned [in the] long term — we’ve seen kind of a convergence of real estate investment [and] infrastructure. Some firms classify data centres as infrastructure, some as real estate.”
Moving on to pricing, investors expect data centres to experience the strongest price appreciation in 2026, outpacing expected price growth among hotels, Grade-A offices and multi-family residential assets.
“While both shell-and-core and fitted products remain stable, underlying income growth and increased belief in the occupier demand side of the equation will drive any material cap rate compression for stabilised assets,” says CBRE.
CBRE first began conducting the annual investor survey in 2014. The latest edition was conducted in November and December 2025, and reflects the views of 422 real estate investors.
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Mega-what? Capex, depreciation could rise as data centres focus on AI
