APAC data centers set to boom as AI demand increases

• US alternatives manager Blackstone and the Canada Pension Plan Investment Board are set to acquire APAC data center business AirTrunk in a A$24bn ($16.1bn) deal.

• AirTrunk is currently owned by Macquarie Asset Management and the Public Sector Pension Investment Board.

• This deal will be Blackstone’s largest to date in the APAC region, and the largest transaction in Australia this year, according to Preqin data. AirTrunk is the largest data center platform in the APAC region with over 800MW of capacity.

• 'Digital infrastructure is experiencing unprecedented demand driven by the AI revolution as well as the broader digitization of the economy,’ said Sean Klimczak, Global Head of Blackstone Infrastructure and Nadeem Meghji, Global Co-Head of Blackstone Real Estate. ‘Prior to AirTrunk, Blackstone’s portfolio consisted of $55bn of data centers including facilities under construction, along with over $70bn in prospective pipeline development.’

Demand for data centers continues to increase, despite continued worldwide power shortages inhibiting the global data center market’s growth, according to CBRE’s Global Data Center Trends 2024 report. Advancements in artificial intelligence are expected to increase demand significantly.

The APAC region’s data center inventory increased by 22% year over year in Q1 of 2024, to 2,996 MW. To compare, North America saw its inventory grow by 24.4% over the same period, Europe saw a nearly 20% increase, and Latin America grew by 15%.

The APAC data center industry is forecast to attract $100bn in investment in the next five years, according to Techwire Asia. A recent Asia Pacific Data Centres report by real estate manager Savills states that growth is being driven by several factors, including digitalization, the adoption of cloud computing and other data-intensive services, the proliferation of 5G networks and The Internet of Things, and regulatory policies mandating local data storage.

Shaun Beaney, Editor of Preqin First Close, wrote that more centers mean more energy demand – another investment opportunity for private capital LPs and GPs. Chris Sharp, CTO of Digital Realty, told the BBC earlier this year: ‘A normal data center needs 32MW of power flowing into the building. For an AI data center, it's 80MW.’

_{The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.}