Data centres across the Asia Pacific are growing in scale. New markets are being evaluated for expansion as operators anticipate increased demand from continued digitization and broader adoption of artificial intelligence.
According to Cushman and Wakefield’s latest Asia Pacific Data Centre Update, five cities – Beijing, Shanghai, Singapore, Sydney and Tokyo – account for 62% of the operational data centre capacity in the Asia Pacific, with Sydney and Tokyo expected to join Beijing and Shanghai in the next one to two years as cities exceeding one Gigawatt (GW) of operational capacity.
Emerging markets are also proliferating, with Indonesia, Malaysia, the Philippines and Thailand all on track to more than double their operational capacity over the next five to seven years.
Pritesh Swamy, director of data centres research and advisory for APAC and EMEA at Cushman and Wakefield, says significant land banking in mature markets and growing data consumption led operators to explore secondary markets.
“The potential capacity of land banks in some mature markets is greater than the combined total capacity of both under-construction and planned pipelines. While it could take more than 10 years to develop these land banks, operators have started to explore other locations.”
He adds cities with populations of over 1 million were often seen as strategic locations for smaller data centres. “Smaller data centres can be used to cater for the local population, or as a way for operators to show their enterprise clients that they have a presence in strategic markets and growth corridors.”
The report also shows that the scale of individual data centres is increasing. Within the top five markets, the average size of data centres under construction is up 32% to 20MW, from an average size of 15MW for currently operating data centres.
The percentage difference across the broader Asia Pacific region is even higher, with the average size of data centres under construction (14.5MW) 57% higher than the average size of operational data centres (9.2MW).
Supplementing the company’s global annual ranking of data centre markets, which assesses data centre markets on their current status, the latest Asia Pacific Data Centre Update also includes a Markets Maturity Index, which classifies 29 data centre cities across four categories (Emerging, Developing, Established and Powerhouse), based on their anticipated evolution over the next five to seven years.
As an example of its application, the Maturity Index classifies Mumbai (which currently has 462MW in operation) ahead of Sydney (724MW) within the Powerhouse category after taking into account, among other factors, its under-construction pipeline of 342MW, which is the highest in APAC.
Beijing, Shanghai and Tokyo also make the Powerhouse category, with each of the five markets having the development pipeline to surpass 2GW in operational capacity over the next five to seven years.
Swamy says the Maturity Index showed plenty of development headroom in Asia Pacific compared to other regions.
“The opportunity for growth is quite significant. If we look at the US, Northern Virginia alone has around 3GW, which is one-third of the cumulative capacity across Asia Pacific, while the entire US market has almost 10GW in operational capacity. Considering that Asia Pacific’s population is around ten times greater than that of the US, we are far behind in terms of the overall capacity we may need,” he concludes.