Article
Business Insights | Power-First: The Golden Rule Informing Data Centre Site Selection in Japan & Korea
March 26, 2026
A thirst for power is transforming the dynamics around data centre site selection across many markets in Asia Pacific, spurring a shift in demand from connectivity-focused tier I urban hubs to locations where power is more easily and readily available.
This phenomenon is primarily being driven by AI’s significant power needs, which are forcing operators and developers to identify and secure sites in secondary cities with rapid, large-scale power availability; a trend gaining increasing prominence in Japan and Korea, among other markets in the region.
Japan: Decentralisation and Alternative Power Sources
Access to grid power, particularly high voltage power sources, remains the biggest bottleneck for new data centre development in Greater Tokyo, and to a lesser extent, Greater Osaka; a challenge set to intensify in the coming years as data centre workloads shift to more intensive AI-driven demand.
This is channeling data centre development toward regional cities such as Fukuoka, where land is cheaper to acquire and the power grid is under relatively less pressure compared to larger metropolitan areas. Another benefit of regional development is that schemes in these locations are eligible for government grant schemes to encourage the regional dispersal of data centres.
While power companies are working to accelerate grid upgrades, these remain slow to execute. In the medium term, however, the Japanese government’s push to restart nuclear power plants should improve power availability and reduce unit cost.
On-site power solutions are also being considered, with CBRE jointly leading a new initiative to help data centres operators secure power supply after land acquisition.
In January 2026, CBRE entered into an agreement with Tokyo Gas Engineering Solutions (TGES) and La Clé de Joie (LCDJ) to support the introduction of Gas Cogeneration Systems (CGS) by data centre operators, with the aim of shortening power supply lead times and reducing the overall development timeline, thereby improving the efficiency of data centre development.
Under the scheme, CBRE identifies and secures sites on behalf of data centre operators, after which TGES and LCDJ install gas turbines. CGS is a globally proven solution that enables early use of both power generation and waste heat and is set to establish itself as an important new power source for data centres in Japan.
Korea: Moving Beyond Proximity to Availability Zones
Data centre site selection in Korea has historically been informed by the need to stay within existing global Cloud Service Providers’ (CSPs) Availability Zones (AZs).
More recently, however, a surge in demand from major domestic technology firms, large conglomerates, and specialised AI enterprises has loosened these rigid constraints, leading to a stronger focus on more nimble sites within Greater Seoul and larger campus style developments outside of the capital.
While the preference for Greater Seoul (Seoul, Gyeonggi, and Incheon) remains high among operators and end-users, the regulatory barrier is higher than ever due to the introduction of the mandatory Power Grid Impact Assessment (PGIA) for data centres with a capacity over 10MW.
Since the introduction of this requirement in 2024, fewer than five data centres have successfully secured power in the Greater Seoul area. This has prompted domestic asset managers and local data centre operators to pivot to smaller data centres with a capacity of under 10MW, enabling them to bypass the PGIA.
Outside the congested Greater Seoul area, the market is moving toward campus-style developments that offer long-term scalability. In regional hubs where the grid is less strained, developers are seeking sites capable of securing 200MW to 300MW of high-capacity power. The campus approach also provides the structural flexibility needed to accommodate the massive, multi-year growth trajectories of AI-driven hyperscalers.
Conclusion
As the Asia Pacific data centre market grows more complex, securing the critical infrastructure that will power the next generation of AI and digital transformation will be critical. CBRE teams in Japan and Korea will be at the forefront of identifying high-capacity sites and verifying the long-term feasibility of power delivery in their respective markets.
Contacts
Andy Kim
Senior Director, Data Center Solutions I Advisory Services, Korea
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