Approximately US$116 billion will be needed to build out the existing colocation data centre pipeline across Asia Pacific in the coming five to seven years as demand for the sector grows, according to calculations by Cushman & Wakefield.

The firm’s recently released Asia Pacific Data Centre H2 2024 Update report shows the pipeline of colocation projects (excluding hyperscale projects) in the region either currently under construction or in late-stage planning stands at 12,452 megawatts.

Using the construction cost of a mid-specification data centre for each market as a benchmark, the total capital required to build out the pipeline currently sits at US$116.2 billion.

By Cushman & Wakefield estimates, this development pipeline provides an opportunity to generate more than US$14.9 billion in annual colocation rent and can potentially achieve almost 13 percent yield-on-cost ratio for developers.

“Demand for the sector continues to grow â