Data center demand continues as land, power constraints drive push into new markets
Cushman & Wakefield has released its annual Global Data Center
Market Comparison report, with Japanese markets outranking other Asia Pacific
counterparts in both the Established and Emerging market categories.
In the Established markets category, Tokyo ranked third
globally behind Virginia and Atlanta, with Mumbai placing seventh and Sydney
ninth. Osaka ranked fourth in the Emerging markets category, with Hyderabad in
eighth place and Bangkok in tenth.
Now in its fifth year, the 2024 report has an updated
methodology to better reflect the rapid changes in both headwinds and tailwinds
shaping the data center market. High weight factors include power availability,
land availability and market size; mid weight factors include development
pipeline, land price, power cost and cloud availability/operator presence.
Thirty
APAC markets were included in the report, including
new entrants Auckland, Batam, Brisbane, Perth, Pune and Taipei.
Asia Pacific highlights
While Singapore and Hong Kong remain in the Asia Pacific Top
10 Established markets, both have fallen out of the global ranking because of
their constrained land supply, with neighbours in Malaysia (Johor) and
Indonesia (Batam) consequently benefiting from their geographical proximity to
Singapore.
Mumbai, Tokyo and Jakarta have jumped up the rankings as some
of the most rapidly growing markets with each scoring well in absorption,
development pipeline and vacancy. Within the emerging markets category, Osaka,
Chennai and Hyderabad benefited from high competition for sites in neighbouring
hotspots Tokyo and Mumbai.
The report shows all three regions—the Americas; Europe, the
Middle East and Africa; and Asia Pacific—are expected to see existing capacity
more than double. Asia Pacific currently has 10.6 GW operational capacity, with
a development pipeline of an additional 13.3 GW expected to be realized in the
coming five-to-seven years.
John Siu, Cushman & Wakefield's Hong Kong Managing Director and Hong
Kong Lead - Asia Pacific Data Centre Advisory Team, said: "Hong Kong, a major player in
the Asia Pacific region, stands strong in the regional ranking alongside Tokyo,
Sydney, Singapore, and Beijing. The demand for high-tier data centers in Hong
Kong remains robust, driven by the need to support cloud computing services.
This demand is underscored by two significant en-bloc leasing transactions
totaling over 300,000 square feet in 2023. BDx secured the en-bloc industrial
building at 38 Wing Kei Road in Kwai Chung, while AirTrunk committed to the
entire San Miguel Industrial Building in Shatin for their wholesale data center
conversion projects. With continuous technological advancements and a surge in
hyperscale activity, Hong Kong's data center market is poised to become a
dynamic hub for cutting-edge services, fostering long-term growth and global
competitiveness."
Cushman & Wakefield's Managing Director and Head, Asia Pacific Data
Centre Advisory Team Vivek Dahiya further added: "Hyperscale
activity has continued to add significant capacity to pipelines across markets
like Mumbai, Tokyo, Sydney and Jakarta. As with other regions, we are also
seeing growing interest in smaller markets. Emerging markets including Osaka,
Hyderabad, Johor and Bangkok in particular are seeing growth. At a country
level, Singapore is on track to join mainland China, Japan, Australia and India
as markets with over 1GW in operational capacity in 2024."
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