APAC data centre demand to double in 3-5 years

Singapore, Hong Kong, Mumbai, Sydney, Seoul and Tokyo are promising markets, says Knight Frank.

Demand for data centres in Asia-Pacific is expected to almost double in the next 3-5 years, with a further 2,838MW either under construction or in committed phased development. Across the ten markets tracked in The Knight Frank APAC Data Centres Market Summary released by Knight Frank – the global property advisor- and DC Byte – the leading online information service for the data centre sector - total live capacity stands at 3,042MW, with an additional 713MW supply added in 2020.

The report features established cities such as Singapore, Hong Kong, Mumbai, Sydney, Seoul and Tokyo and fast growth data centre destinations including Hanoi, Bangkok, Shanghai and Kuala Lumpur to provide the best picture yet of the region. Growth was seen across all markets, with Tokyo and Shanghai notably reaching “Gigawatt Market” status, comparable with leading European markets of Frankfurt, London, Amsterdam, and Dublin. Another market to watch is Mumbai, which has now overtaken several European markets, including Paris, in terms of market capacity.

Christine Li, Head of Research at Knight Frank, Asia-Pacific, said: “Asia-Pacific’s appetite for data is only set to grow with the roll-out of more 5G networks across the region, an increasingly connected digital population, as well as increased adoption of remote working arrangements. As such, most markets in Asia Pacific are supply constrained, resulting in more land-owners and developers redeveloping vacant or aged industrial properties to higher tiered data centres to ride on the next wave of growth.”

Adeline Liew, Data Centres Lead, Knight Frank, Asia-Pacific, said: “This growing demand for data is heating up land values for data centre sites in emerging markets like Southeast Asia and India where developers are keen to partner with established data centre operators. These operators are also keen to buy greenfield sites for development led by hyperscale initiatives. In addition, tech firms such as Tencent Cloud have also been expanding aggressively across the region. In response to this trend, Knight Frank has been turbocharging its capabilities with expanded local market intelligence and data-centre specialists in the region.”

“Demand from investors for information on APAC compelled us to expand our research coverage,” explained Ed Galvin, Founder and CEO of DC Byte.  “The Knight Frank APAC Data Centres Market Summary now represents the most comprehensive view of ten select markets, covering both the rental colo sector and self-build activity. It has been a genuine eye-opener to see a market previously overlooked flourish and grow. Investment interest in these regions could suggest that the hyperscale activity seen to date in Europe is now expanding East.”

Being midway between Singapore and Tokyo, Hong Kong is uniquely positioned as a data gateway for the Chinese mainland.  However, we are land constrained, particularly when it comes to sites for standalone higher-tiered data centres. Any greenfield sites zoned for such use will be sought-after.  We also expect to see more landlords redevelop their aged industrial buildings to high-tiered data centres, added Paul Hart, Managing Director, Commercial Markets, Knight Frank Hong Kong.

To view the APAC report please click here.