Mumbai, September 19th, 2025 – Knight Frank, in its latest report- Asia-Pacific Data Centres 2025, highlights Mumbai’s rise as India’s data centre capital. According to the report, the city leads India’s data-centre landscape accounting for 40% of total national capacity and 44% of live IT capacity.
In H1 2025, Mumbai’s capacity rose 14.3% to surpass the 4GW milestone, with 591MW operational, 185MW under construction, and 3.2GW in the pipeline. This growth builds on India’s data centre market surpassing 10GW in H2 2024, supported by 1.4GW live and 400MW under construction.
Rapid cloud adoption, increasing data localisation requirements, as well as the growth of local fintech and BFSI firms has been fuelling data-centre demand. Over the past six months, Mumbai recorded 97.6MW of take-up. This has translated to a tight vacancy rate of just 5.4% vs. India’s overall colocation vacancy rate at 12.3%. Demand-side commitments seem resilient with absorption broadly keeping pace with the multi-fold growth in supply over the past years. Also, two-thirds of Mumbai’s capacity under construction at present is already pre-leased.
Yet, with just three live sites currently capable of supporting hyperscale deployments (>2.5MW) and only one site with available capacity of more than 10MW, there seems to be a short-term supply tightness for big-ticket requirements. Distribution of available live capacity is skewed toward smaller deployments: 10 sites offer <1MW, 5 sites fall in the 1–2MW range, while only 3 sites provide >3MW.
Such fragmented deployments are opening doors for well-capitalized global players and joint ventures to deliver high-capacity facilities in the region that is currently dominated by local players. The 500MW NAV2 campus announced by NTT and another 500MW AI facility by Blackstone-Panchshil Realty are case in point.
Also, operators with large-scale requirements are exploring alternative markets. Hyderabad is positioning itself as a hyperscale-first market, with over 500MW of new data centre capacity currently in the pipeline through two projects. STT GDC India has signed an MoU with the Telangana government to develop a 100MW campus, while NTT has committed INR 10,500 crore (approximately USD 1.25 bn) to establish a 400MW AI-focused data centre campus.
Hyderabad is the second largest data centre market in India with 2.1GW of total capacity, followed by Chennai (1.6GW), New Delhi (712MW) and Bengaluru (307MW).
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said: “Mumbai has firmly established itself as the epicentre of India’s digital infrastructure growth. With over 3GW of capacity in the pipeline and strong policy support for green data centre parks, the city is attracting sustained global investment. As cloud adoption and AI workloads accelerate, Mumbai’s unique strengths, its robust subsea cable connectivity, scalable power infrastructure, proximity to enterprise hubs, and progressive state policies are consolidating its position as India’s data centre capital. While other metros like Chennai, Hyderabad, and Bengaluru are gaining traction, none match Mumbai’s scale, speed, and ability to serve as South Asia’s gateway for cloud, AI, and enterprise workloads.”
In the first half of 2025, the APAC region secured nearly 13GW of new project announcements, a 160% increase and more than double the 5GW announced in the same period last year. The funding needed for these projects already exceeds US dolar 180 billion.
Major technology firms are driving much of this investment. Amazon is projected to exceed US$100 billion in capital expenditure for 2025, up from about US dolar 82 billion last year, while Microsoft invested US dolar 55 billion in 2024 and has committed more than US$33 billion this year. Collectively, Microsoft, AWS, Google, and Meta have committed over US dolar 160 billion in 2025 alone, reflecting the intensity and scale of current infrastructure development.
Fred Fitzalan, head of data centres Asia-Pacific, Knight Frank says, “The sheer volume of new projects in the region highlights just how important the region has become in the global digital infrastructure landscape. However, coordinating this rapid growth is a complex challenge, as operators must keep pace with advances in technology and rising energy needs, all while ensuring new facilities are delivered in step with evolving demands.”
Alongside the hyperscalers, GPU-as-a-Service providers are expanding rapidly, seeking multi-megawatt capacity across the region and bringing greater diversity into leasing conversations. Creditworthiness and shortened deployment timelines remain perennial challenges, but innovative guarantee structures are enabling some operators to compete effectively for new contracts.
Fred adds, “What has become clear is the strict requirement for operators to design facilities with capacity that can be flexibly deployed for either Cloud or AI workloads, offering tenants maximum optionality. While this adds cost, it is now a decisive factor in site selection. Locations that combine proximity to parent sites with sufficient power allocations to support long-term runway are winning out, although this remains a significant challenge given national grid constraints and permitting delays in Tier 1 APAC markets.”
Johor established itself as Southeast Asia’s fastest-growing data centre hub, with aggregate supply nearly doubling over the last 12 months to 5.8GW in Q2 2025, including 2.0GW of new project announcements, backed by strong government support and the rollout of national Data Centre Planning Guidelines.
Take-up: Johor recorded 260.0MW of take-up in the first half of 2025, with social media accounting for 61% and the remainder driven by AI demand. The market is now highly constrained, with a vacancy rate of just 1.1%, as planning becomes more challenging and power shortages coming through.
Tokyo continues to hold its position as a key regional hub with aggregate capacity exceeding 4.2GW, a 2.7% increase on volumes recorded at the end of Q2 2024. Investment activity remains strong, highlighted by Ares completing a US$2.4 billion Japan-focused fund through Ada Infrastructure, while Mitsui & Co. Asset Management’s US$122 million acquisition signals sustained domestic investment appetite.
Take up: Over the past six months, Tokyo recorded 41.1MW of capacity transacted. This is a slowdown from the first half of 2024, when 286.6MW was transacted, due to reduced supply in the market. Tokyo continues to be a tightly constrained market, with colocation vacancy rates at just 7.0%.
Melbourne is stepping out of Sydney’s shadow, with total supply nearly tripling to 4.7GW as of Q2 2025, as land and power constraints push development south. The city now hosts dedicated cloud regions from all four major US providers: AWS, Microsoft, Google, and Oracle, with 95% of colocation take-up driven by AI workloads. Live IT capacity is now 337.1MW, marking a 25.4% year-on-year increase. This growth trajectory is expected to continue, supported by a pipeline of 934.8MW in committed and under construction projects.
Take-up: In the first half of 2025, Melbourne saw 127.6MW of transacted capacity, with artificial intelligence remaining a primary driver of demand and representing 95% of all colocation take-up.
Seoul’s investor appetite remains strong. LG U+ is set to grow its 87.2MW footprint with a US$441.7 million investment in a new AI-focused data centre. Meanwhile, Macquarie Asset Management has acquired the 40MW Hanam Data Centre for around US$538.4 million. No new capacity has been added to the market since Q3 2024, keeping total supply steady at 1.8GW.
Take-up: In the first half of 2025, Seoul recorded 86.2MW of leasing activity, with 85% of that occurring in the second quarter. Demand was split between enterprise users and public cloud providers, alongside an emergence of Chinese tenants entering the market in a bid to diversify their AI strategies across APAC.
Investment evolution
The funding landscape is evolving, with infrastructure and private equity capital increasingly partnering with operators on developer-led powered shells to achieve faster time-to-power deployment.
Looking ahead, grid capacity and power availability remain major constraints, with geopolitical considerations shaping project delivery timelines. Despite these challenges, momentum remains strong. Cloud providers in the US and China now often compete for the same capacity, driving up rental values, particularly in North Asia. Additionally, the AI ecosystem continues to expand beyond traditional hyperscale deployments. The task ahead is to synchronise these vast expansions with technology evolution and energy demand, building digital infrastructure that is both flexible and future ready.