Asia Pacific data center market outpacing UK for growth

Data center developments in the Asia Pacific region currently account for more than 1.5 million square metres of floor space, with five countries accounting for almost two thirds of that.

A new survey from Data Centerpricing shows that Australia, Hong Kong, Indonesia, South Korea and Thailand taking the focus for developments in the region and supporting large-scale growth over the next three years.

The four fastest-growing data center marketing in Asia Pacific will grow 90% over three years, with Australia growing 97% to more than 417,000 square metres of space under development. In contrast, the Europe market has 850,000 square metres under development.

China, which accounts for the second-largest data center market behind the United States of America, accounted for more than 1.7 million square metres of space at the start of the year. Space in locations such as greater Beijing and Shanghai/Yangtze River area will add more than 239,000 square metres, the equivalent of 14% growth.

Singapore is the second biggest data center market in Southeast Asia with more than 417,000 square metres of space and 22% growth ahead, thanks to another 92,000 square metres expected to be developed over the next three years.

While Singapore's growth is modest, the survey notes that the Singapore Government enacted a data center expansion moratorium to allow other markets such as Indonesia and Malaysia to grow.

The survey also found that most markets are constructing large campus hyperscale data center facilities, for example NEXTDC's 150 MW campus in Melbourne.

Furthermore, data center investment is growing due to new sources of funding from both private equity and sovereign wealth funds.

The survey notes, "The new sources of funding from private equity funds has allowed more speculative projects to be initiated by PDG, Digital Edge, Mapletree Investment Trust (MIT) and Lendlease all are backed by private equity - sovereign wealth funds.

Furthermore, more investments are being funnelled into data center markets that are either new or under-utilised, such as Indonesia and Malaysia.

"For example, GDS is building a facility at Johor (Malaysia) and Data Center First is building a facility at Batam island (Indonesia) close to Singapore. ST Telemedia is also building a campus of up to 60,000 square metres of space near Bangkok (Thailand).

Data CenterPricing is a UK-based consultancy and research firm. The survey examined 11 Asia Pacific Data Center countries including Australia, China, Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand and Vietnam.