Fitch Unit: Malaysia, Indonesia and India to Lead Asia’s Data Centre Growth Through 2028

KUALA LUMPUR (Nov 12, 2025) — Asia’s fast-expanding data centre industry is expected to drive a substantial increase in regional power demand through 2028, with Malaysia, Indonesia and India emerging as the top growth markets, according to BMI, a research unit under Fitch Solutions.

BMI’s technology team forecasts an average annual data centre capacity growth of 9.7% across the Asia Pacific (APAC) region from 2025 to 2028 — reflecting strong digitalisation, rising cloud adoption and heightened enterprise demand.

Malaysia, Indonesia and India Now the Region’s Powerhouse Markets

BMI noted that Asia’s data centre boom is partly fuelled by capacity constraints in Singapore, where limited supply and rising leasing costs have driven hyperscale operators to seek alternative locations.

This shift has pushed regional interest aggressively toward Johor in Malaysia and Batam in Indonesia, both of which are increasingly seen as scalable and cost-competitive extensions of Singapore’s ecosystem.

BMI added that this trend is boosting Malaysia’s visibility globally — a development that also supports broader real estate demand in the Klang Valley, including industrial land in Selangor, modern industrial property in the Subang area, and supporting commercial zones such as factory facilities in Puchong and commercial property in KL where service providers and tech firms expand their presence.

Rising US Costs Strengthen Asia’s Appeal

Beyond regional dynamics, BMI highlighted that rising electricity prices in major US data centre hubs — in some cases more than doubling — have weakened America’s long-term competitiveness.

BMI emphasised that:

• The current US administration’s focus on powering data centres with costly natural gas generation

• A slowdown in clean-energy support

• Supply chain bottlenecks in gas equipment

…have all increased project costs and prolonged delivery timelines.

In contrast, Asia offers shorter renewable-energy deployment cycles, notably in solar, along with generally lower energy prices, making it an increasingly preferred destination for hyperscale expansions.

Malaysia’s Growth Comes with Infrastructure Pressure

While Malaysia is one of the region’s fastest-growing data centre hubs, BMI cautioned that the rapid pace of investment is straining local resources.

Key challenges include:

• Rising pressure on land availability, especially in high-demand zones

• Grid capacity constraints

• The need for accelerated renewable-energy deployment

These factors may influence future site selection — potentially creating knock-on demand for distributed locations, including emerging corridors with strong connectivity and growing ecosystems around Selangor and greater KL.

Such demand often correlates with broader real estate activity, including office space in Bukit Jalil supporting tech operators, and new logistics-linked developments around factory zones in Puchong.

India Poised for Strongest Clean-Energy Advantage

While Malaysia and Indonesia are leading today’s expansion, BMI said India is best positioned to meet long-term data centre demand due to its policy support for renewable energy and relatively high clean-power availability.

BMI estimates that less than 10% of India’s upcoming renewable output over the next five years will be needed to power new data centre loads — leaving significant spare capacity for other sectors.

In contrast:

• Malaysia

• Indonesia

…are expected to see data centre power needs outpacing renewable energy growth by up to four times, restricting the depth of clean-energy options for hyperscale operators.