Singapore data centre Reits chase Japan deals as power crunch raises stakes
Scarcity of power-ready assets supports valuations, but grid constraints could make further expansion harder
Singapore-listed data centre REITs are increasing their investments in Japan as demand for computing capacity soars, sparking fierce competition for scarce power-ready assets. Keppel DC REIT's proposal to acquire two Tokyo data centres would boost Japan's rental income contribution to 23%, up from 9%. Digital Core REIT agreed to stake 45% in an Osaka data centre, up from 20%.
Experts say Japan offers Singapore REITs scale, maturity, lower risk, and deeper liquidity compared to other markets. Analysts point to growing investor appetite for high-quality, operational data centres in Japan that have long-term access to power. Competition for operational facilities in Japan has pushed asset values up over the past two years, with investors willing to accept lower yields for assets offering immediate income.
Both Keppel DC REIT's proposed Tokyo assets and Digital Core REIT's Osaka assets are fully occupied. Japan's data centre market is driven by increasing domestic enterprise workloads, cloud adoption, rising AI workloads, and attractive yen-denominated financing. Japan has over 1.8 GW of operational capacity and a vacancy rate of 6.6%, making it one of Asia-Pacific's largest and most mature data centre markets.
Prices for colocation racks rose about 3% in 2025. Supply is expected to increase to 3.5 GW by 2030. However, securing access to suitable assets remains a challenge for Singapore REITs expanding in Japan.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
