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View all search resultsProperty investment shifts from office rooms to data centers
The growth comes with mounting challenges, from the soaring power requirements that could strain limited energy supplies to water-related risks such as competition over water resources needed to cool the facilities.
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A model prototype of data center project SMX01, a joint venture between Sinar Mas digital infrastructure and services company SM+ and Korea Investment Real Asset Management (KIRA), that is set to be completed in the second half of 2026. (TJP/Ni Made Tasyarani)
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ndonesia’s real estate investment is increasingly gravitating toward the booming data center sector, fueled by the country’s fast-expanding digital economy and surging demand for artificial intelligence (AI) infrastructure, property consultants report. The shift is most visible in Jakarta, where businesses are racing to secure data centers in proximity to users for faster connectivity and greater reliability.
But the rapid growth comes with mounting challenges, from the soaring power requirements that could strain limited energy supplies to water-related risks such as flooding and competition over water resources needed to cool the facilities.
The latest research from property consultancy firm Jones Lang LaSalle (JLL) Indonesia, released in October, shows that investment trends in Indonesia’s real estate sector have shifted away from the traditional office market toward alternative segments, including data centers.
“Indonesia’s real estate market is at a pivotal point, where the adjustment to oversupply in the traditional [office] sector is creating opportunities for alternative sectors such as logistics, education, healthcare, hospitality and data centers,” said Farazia Basarah, country head of JLL Indonesia.
Since 2021, the capacity of data center colocation, shared facilities that host and power servers for multiple companies, in Indonesia has tripled, with Jakarta and Batam in the Riau Islands remaining key hotspots, according to JLL.
A 2025 property outlook report from real estate agency Knight Frank Indonesia has noted a similar trend, with the office building sector projected to experience stagnant growth, while data center, industrial and warehouse segments are poised for continued expansion.
Citing the report, Syarifah Syaukat, senior research advisor at Knight Frank, told The Jakarta Post on Tuesday that data centers hold significant potential to drive the country’s property sector growth, adding that the trend is particularly evident in major urban areas such as in Greater Jakarta and Batam.
