SINGAPORE – Singapore remains the main hub for private equity deals in South-east Asia, but when it comes to data centres, investors are increasingly moving their money beyond the city-state.
In a new report, management consulting firm Bain & Company said the region attracted around US$14 billion (S$18 billion) of private equity investments across 84 deals in 2025. Singapore accounted for the largest share at US$7 billion, followed by Malaysia at US$5.3 billion.
But in one of the hottest areas – data centres – where demand is rising rapidly with cloud computing and AI adoption, investors are increasingly placing their bets on lower-cost neighbouring markets, such as Johor in Malaysia, Batam in Indonesia, and the coastal town of Chonburi in Thailand.
Singapore faces constraints in a few areas. Land is scarce and expensive at about US$1,700 (S$2,174) per sq m. Power supply is tight and new projects can take five to seven years to secure grid connections.
As a result, the neighbouring markets are likely to capture much of the spillover demand, which is projected to reach around 10 gigawatts of capacity by 2030, Bain said.
Nevertheless, Singapore will continue to attract capital as the “strategic base for leading operators”, given its strong connectivity and stable regulatory environment, said Mr Tom Kidd, head of Bain’s South-east Asia private equity practice.
Some recent deals bear this out. Singapore-headquartered data centre company Digital Edge, for example, raised over US$1.6 billion in 2025 to support its growth. Princeton Digital Group, another company headquartered here, secured US$1.3 billion in 2025 to fund its regional expansion.
Other Singapore-based companies that have secured significant investments in 2025 include logistics firm GLP and power infrastructure provider Amperesand.
Overall, private equity activity in South-east Asia has slowed in 2025 compared with 2024 – both in terms of value and number of deals.
The decline points to a more cautious investment climate, with more capital deployed in a smaller number of huge bets.
“Capital is concentrating in fewer deals, and investors are more selective than at any point in recent years, with a clear focus on assets that can deliver value through execution,” said Mr Kidd.
The report also highlighted the issue of “exit overhang” in South-east Asia, where investments are being held for longer periods as opportunities to sell are limited.
Singapore led the region with four exits in 2025.
On the whole, exit value across South-east Asia fell by about 32 per cent.
The report included a survey, which found that exit conditions were the top concern among South-east Asian investors, ahead of geopolitical tensions and challenging macroeconomic conditions.
While more South-east Asian investors said they expect a positive return over the next three to five years, a growing proportion of them turned pessimistic this year, compared with 2025.
