Indonesia data centre market to hit US$3.07b by 2026 | Real Estate Asia
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Indonesia data centre market to hit US$3.07b by 2026

Other cities besides Jakarta are attracting investor attention.

One of the biggest growth engines in the Southeast Asian data centre market is Indonesia. As the country aims to account for 40% of the ASEAN digital economy by 2025, the demand for data centre developments is expected to skyrocket.

According to Savills, Indonesia’s favourable demographic combined with supporting policies have also accelerated the growth of the local data centre market among which, two regulations are particularly influential. 

Here’s more from Savills:

Regulation (PP) 71/2019 states that all firms, particularly financial institutions, are required to store personal data in data centres located inside the country. 

The central bank through Bank Indonesia Regulation No 9/15/ PBI/2007 also states that all banks and financial institutions must own a backup mechanism through a Disaster Recovery Center (DRC), a replacement facility which allows firms to recover data and resume operations in case of emergency. 

While existing data centre projects are still largely concentrated in the Greater Jakarta region, often located inside industrial estates, other major cities such as Surabaya, Bandung, Bali, and Batam are attracting investor interest. Major constraints hindering data centre investment in Indonesia include a lack of network infrastructure and an unstable power supply, particularly in rural areas. 

As such, developments have so far been concentrated only in the major cities. Nonetheless, the market still demonstrates huge growth potential. According to a report by Mordor Intelligence, the Indonesian data centre market was valued at US$1.53 billion in 2020 and is expected to double by 2026 to US$3.07 billion. 

Looking ahead, we expect to see more local and international players entering the market. Existing industrial estates will need to upgrade their networks and power supply infrastructure to meet the growing technical requirements and compete for tenancies. 

Currently, Indonesia’s state-owned electricity company (PLN) is intensively collaborating with industrial estates to provide a constant supply of electricity to international standards.

 

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