Singapore data centre occupancy exceeds 95% as supply remains tight

Low vacancy is expected to persist given the lack of meaningful new supply in the near term.

Singapore's data centre occupancy is expected to remain above 95% through 2026 as strong demand meets tightly constrained supply, according to CBRE Research.

While demand remains strong across Singapore's co-location and hyperscale segments, capacity constraints are encouraging activity and requirements to shift towards alternative Southeast Asian markets including Johor, Kuala Lumpur and Bangkok, CBRE said.

Cloud and AI-related demand are the main sources of large-scale requirements, with connectivity-led and enterprise deployments continuing to support smaller colocation demand. Singapore is also becoming increasingly selective about customer quality and sustainability, with stronger-credit customers and those able to demonstrate better energy efficiency gaining an advantage in securing capacity.

Supply remains constrained

CBRE said DC-CFA1 has delivered four awards of 20 MW each, while DC-CFA2 is expected to provide at least another 200 MW. However, new data centre development is heavily controlled geographically, with Jurong Island identified as the main area earmarked for future projects. Operators are consequently finding it increasingly difficult to develop outside designated areas.

Newer facilities are increasingly competing on specification and efficiency, while established facilities retain advantages through stronger embedded connectivity or valuable customer ecosystems.

Occupancy is expected to remain above 95%, with low vacancy anticipated to persist given the lack of meaningful new supply in the near term. CBRE said that even if additional data centre capacity is approved, it is unlikely to fundamentally loosen the market because of expected rapid absorption and long development timelines.

Investment market

Singapore remains a highly coveted investment market, but investment activity is subdued as assets remain tightly held, with owners generally unwilling to sell, according to CBRE.

The limited recent transactions have included Keppel and CapitaLand, with assets moving between development platforms and REIT structures.

CBRE said AI-readiness of existing stock is becoming an increasing concern, as many legacy facilities were not designed for current AI workloads. This is creating opportunities around facility refreshes, retrofits, energy optimisation and sustainability-led upgrades.

Beyond planning controls, power availability remains the principal development bottleneck. The market is expected to remain tight through 2026, with rents forecast to trend stable to slightly upward and occupancy likely to remain above 95%, reinforcing Singapore's position as a landlord's market.

Selected market movements

Keppel has started construction on its 25 MW floating data centre project, with the facility scheduled to come online in 2028 and fully committed to a global hyperscaler, CBRE reported.

Digital Realty has pledged more than US$3.4 billion for new data centre development, building on its existing network to reinforce Singapore's critical role as an AI infrastructure hub.

Singapore market snapshot

CBRE's Q1 2026 data shows Singapore with 821 MW of total data centre capacity and a further 247.5 MW of upcoming capacity.

The firm's 2026 outlook indicates colocation prices are expected to rise, while vacancy is expected to remain broadly stable. CBRE puts the indicative cap rate at 5.25-6.50% as of Q1 2026.