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Mainland China retains largest operational capacity in Asia-Pacific with 3.8 GW
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Beijing and Shanghai are the only cities in the region with operational capacities >1 GW
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Hong Kong data center space expected to grow 34% over next three years
HONG KONG SAR – Media OutReach – 28 August 2023 – Asia-Pacific data centers are gaining momentum and new markets are being evaluated as operators anticipate increased demand from continued digitalization and wider adoption of artificial intelligence .
According to the latest Cushman & Wakefield report
Asia-Pacific Data Center Updatemainland China retains its position as the dominant data center market in Asia-Pacific, with the largest operational capacity at 3.8 gigawatts (GW), nearly 40% of the regional total, followed by Japan with 1.1 GW and Australia with 1.1 GW.
Five cities – Beijing, Shanghai, Singapore, Sydney and Tokyo – account for 62% of operational data center capacity in Asia-Pacific, with Sydney and Tokyo set to join Beijing and Shanghai in the next two years, with cities exceeding 1 GW of capacity operational. ability.
Major markets in the region, including Hong Kong, continue to experience growth despite challenges related to a limited supply of land plots and the availability of electricity. To help support the industry, the Hong Kong government has implemented initiatives such as the Data Center Facilitation Unit (DCFU), which aims to attract significant investment, improve infrastructure, facilitate industry collaboration and ensure an enabling environment for data center operations.
John Siu, Managing Director, Hong Kong at Cushman & Wakefieldsaid, “Hong Kong is a robust data center market with excellent regional and global connectivity and availability of all major cloud networks. As the world’s financial and commercial capital, strategic location as a gateway to mainland China and for its lowest-taxed data in the world. In the data center jurisdiction, there has been a strong demand from investors and data center operators, which has triggered a high volume of transactions over the past few years.
“The limited supply of land and waiting times for power supply are challenges for the expansion of the sector. However, we expect over 3 million square feet of new data centers to be completed over the next three years, representing a growth of 34% over current stock. We can expect this increase in supply to attract more relevant companies and technology operators from the mainland and overseas to expand in Hong Kong.
Due to supply challenges in primary markets, ancillary sites are also being evaluated as part of expansion strategies. These emerging markets are now growing rapidly, with Indonesia, Malaysia, the Philippines and Thailand all on track to double their growth. [>200% increase] their operational capability over the next five to seven years.
Pritesh Swamy, Director of Research and Data Center Consulting for APAC and EMEA at Cushman and Wakefield, said a large land reserve in mature markets, coupled with growing data consumption, is driving operators to explore secondary markets.
“The potential land bank capacity in some mature markets is greater than the combination of pipelines under construction and planned. Although developing these land banks could take more than 10 years, operators have begun to explore other locations.”
He said cities with more than a million people are often seen as strategic locations for small data centers.
“Smaller data centers can be used to meet the needs of local populations or for operators to show their enterprise customers that they are present in strategic markets and growth corridors.”
The report also shows that the size of individual data centers is increasing. Across the top five markets, the average size of data centers under construction increased by 32% to 20 MW, compared to an average size of 15 MW for data centers currently in operation. Across Asia Pacific, the percentage difference is even greater, with the average size of data centers under construction (14.5 MW) being 57% larger than the average size of data centers in operation (9 .2MW).
The Maturity Index extrapolates growth trajectories to provide future insights
Complementing the company’s annual Global Data Center Market Rankings, which assess data center markets based on their current state, the latest
Asia-Pacific Data Center Update also includes a Market Maturity Index, which ranks 29 data center cities into four categories (emerging, developing, established and powerhouse), based on their anticipated evolution over the next five to seven years.
As an example of application, the Maturity Index ranks Mumbai (which currently has 462 MW in operation) ahead of Sydney (724 MW) in the power plant category after taking into account, among other factors, its pipeline under construction of 342 MW, which is the highest in APAC.
Beijing, Shanghai and Tokyo also fall into the Powerhouse category, with each of the five markets having a development pipeline to exceed 2 GW in operational capacity over the next five to seven years.
Figure 1: Asia-Pacific Market Maturity Index
The Cushman & Wakefield Asia-Pacific Market Maturity Index tracks the evolution of 29 data center markets based on metrics such as operational, under construction, planned and reserve IT MW capacity. Note that Northern Virginia is not to scale.
Please click
here to download the full report.
Note to Editors
The Maturity Index is a statistical comparison that assesses markets on 21 metrics, including IT MW capacities of each market’s operational, under construction, planned and land development stages, as well as vacancy rates, number and the average size of data centers by status, the number of operators with operational data centers in each market, and the number of new operators planning to enter the market. These data points are stacked in a parameter matrix and weighted to get their overall growth score: the higher the growth score, the more evolved the market.
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