This article is from the Australian Property Journal archive
ASIA Pacific is set to become the world’s largest data centre region over the next decade, amid insatiable demand for cloud computing and the digital economy.
According to Cushman & Wakefield’s latest 2022 Data Centre Global Market Comparison report, among the top 10 data centre markets in the world are Singapore, Hong Kong and Sydney, which is set to become home to the Asia Pacific’s largest single-campus hyperscale data centre outside of China after AirTrunk announced plans for a new facility late last year.
Australia’s data centre market is set to grow by 97% over the next three years, leading the region in market growth.
Construction totals continue to grow globally, with 4.1 gigawatts (GW) currently underway, up from 2.9 GW in the previous study and 1.6 GW in the year before that. Large clients continue to require larger builds, with 100-megawatt campuses becoming increasingly common.
Northern Virginia was the world’s largest data centre market for a third consecutive year, boasting a strong construction pipeline, excellent connectivity, attractive incentives, and low-cost power.
Singapore is second globally, alongside Silicon Valley, followed by Chicago and Atlanta in a tie for fourth, Hong Kong, Phoenix, Sydney in eighth, Dallas, and Seattle and Portland.
Across the Asia Pacific, Seoul is in fourth, followed by Tokui, Osaka, Mumbai, Shanghai, Melbourne and Beijing in a tie for 10th, and Jakarta.
According to the report, further growth is expected throughout at least the next five to 10 years as the region requires new builds due to a lack of existing infrastructure for retrofit. Latin America and Africa are also expected to witness considerable growth in coming years, as new undersea cables deliver faster access to many markets for the first time.
Secondary markets including Jakarta, Osaka and Seoul, and several core markets across India, are expected to reach current primary market size over the next three to five years with new tertiary markets also arriving on the scene. Hyperscalers are the driving force behind this, according to Cushman & Wakefield, with both US- and China-based companies battling for market share regionally.
“Asia Pacific’s outlook is exceptionally positive, with many multinational enterprises requiring further refinement in the cloud (or across multiple cloud services) and many regional governments pursuing online service access,” said Todd Olson, managing director, Japan & Korea, and head of Asia Pacific data centre practice group at Cushman & Wakefield.
COVID-19 related disruptions continued to drive demand for cloud-based services, meaning another big year for Sydney’s data centre market as evidenced by a low vacancy rate relative to international peers of circa 7%. That followed data centre operators acquiring 550,000 sqm of land over 2020 in western Sydney alone.
According to Sean Ellison, NSW research manager at Cushman & Wakefield, Sydney has been able to maintain its standing amongst the top data centre markets globally through a continued investment in a “smart city” capabilities and its ability to provide all three major cloud services in Amazon Web Services, Microsoft Azur and Google Cloud.
“Perhaps even more important is the City of Sydney’s commitment to using 100% renewable energy by 2050, which has ensured the sustainability of the Sydney data centre market. Along with a stable investment environment, this provides a long-term growth opportunity as well as a diversification option for commercial real estate investors” he said.
The data centre sector is seeing a number of operators looking at sustainability initiatives given the energy-intensive nature of the infrastructure. LOGOS and Pure DC are set to team up in developing new sustainable hyperscale data centres across the Asia Pacific, while AirTrunk plans to reveal a net zero emissions roadmap this year after converting an existing $2.1 billion corporate loan into a sustainability-linked loan.
As in Seoul and Tokyo, Sydney is set for considerable growth as there is still land and power available in key nodes.
