ESR, STT GDC, Baker Mac, Yardi See Maturing Market Boost Hyperscale Appeal: MTD TV

A boom in AI and cloud applications and an aggressive field of hyperscale tenants are boosting demand for a higher order of digital infrastructure in Asia Pacific, according to speakers from ESR, ST Telemedia, Baker McKenzie and Yardi at the first session of Mingtiandi’s 2025 APAC Data Centre Forum on Thursday.

With 55 percent of respondents to a Mingtiandi investor survey having ranked hyperscale as the most attractive data centre segment in APAC, projects of 20 megawatts or more will increasingly change hands as stabilised assets enter the market, the guests told MTD TV viewers during the forum, which is sponsored by Yardi.

ESR data centre CEO Diarmid Massey sees data centre developers and operators in Asia Pacific benefiting from a broader client base than in some other markets, providing more potential tenants for new projects.

“In Asia, obviously we are lucky enough to have access to a lot more hyperscalers than perhaps in North America and some parts of Europe, because not only do we have the North American and European hyperscalers, we have a strong market of local Chinese-based hyperscale companies such as Alibaba, Tencent and ByteDance,” Massey told MTD TV. “And these guys are driving significant demand as they expand outside of China.”

Monetisable Market

With Bain Capital on Wednesday having announced its sale of the Chinese business of data centre operator WinTriX DC Group to mainland investors for $3.9 billion, Asia’s data centre market is witnessing more trades of stabilised data centre assets, as institutional investors chase the long lease terms and steady cash flows that can be achieved in the sector, said Edwin Wong, a partner at Baker McKenzie, who advised on last year’s $16 billion sale of regional platform AirTrunk to Blackstone and CPPIB.

“One of the trends we’re seeing is that you have a number of private-equity-backed platforms, backed by Bain, backed by other private equity firms, that started building their platform quite a few years ago and have now developed and hold a number of stabilised core data centre assets and they’re looking to monetise that and return capital to investors,” Wong said.

Massey, who oversees ESR projects including the 130MW Cosmosquare campus in Japan’s Osaka, also pointed to the ability to lease to hyperscale customers as critical to stabilising data centre portfolio and achieving returns for investors.

“Hyperscalers with constant and growing demand are those takeout customers that everyone wants, because they’re going to lease and take up that asset as quickly as possible,” Massey said. “So the asset then becomes saleable as it stabilises.”

Scale and Consequences

As head of investments and strategy at Singapore-based ST Telemedia Global Data Centres, Michael Tanujaya sees barriers to growth in the company’s home market helping to redistribute demand across the region.

“Due to the lack of capacity in Singapore, you’re starting to see demand overflow in markets like Bangkok and in Malaysia,” Tanujaya said. “So it’s almost like a merry go round. You went from Singapore into Johor Bahru.”

Bernie Devine, senior regional director for APAC at proptech software designer Yardi, has seen the needs of data centre platforms reach new levels of size and sophistication.

“If I go back maybe just three to five years, the data centre investment organisations coming to us wanting to build a platform to develop data centres and then to operate data centres was probably a very, very light touch,” Devine said. “Whereas now I would say every third organisation I’m talking to is wanting advice on how to establish a development platform and from a technology perspective and then how to really build something that’s scalable.”

Southeast Asia Up Next

The Mingtiandi Data Centre Forum continues on Tuesday 16 September with a panel discussion of the forces attracting data centre investors to Southeast Asia.

With Thailand and Malaysia accounting for 64 percent of newly planned capacity in APAC during the first half of 2025, according to Cushman & Wakefield, the subregion is becoming the centre of data centre investment in the region.

The Southeast panel brings together Yasuo Suzuki, executive vice president for APAC at NTT Global Data Centres; Woon Teng Koh, senior director for acquisitions at Digital Realty; and Baker McKenzie partner Robert Wright.