JLL secures significant plot for digital firm in Thailand
JLL Thailand has successfully negotiated a significant real estate acquisition on Bangna-Trat Road for a major digital infrastructure company, reinforcing Thailand's position as an emerging hub for data centres.
The transaction aligns with a growing interest from data centre operators to invest in Thailand, encouraged by factors such as the nation's readiness to serve as a digital hub, increasing demand for data-related services, and supportive government policies. These include Thailand's Cloud First Policy initiative and the Board of Investment's approval of long-term investments to strengthen digital infrastructure.
Thailand's potential as a regional data centre hotspot is underscored by its robust internet penetration rate of over 85% and substantial social media user base. Such indicators highlight the country's foundational strengths in the data centre business. A planned investment of USD $500 million by a global digital infrastructure corporation further confirms Thailand's growing appeal as a prime location in Southeast Asia for data centre development.
Mr. Krit Pimhataivoot, Head of Capital Markets at JLL Thailand, remarked on the transaction: "The increasing demand for high-quality data centre facilities in Thailand demonstrates the country's growing importance as a hub for digital infrastructure in Southeast Asia. Data Centre is a highly risk-averse business where site selection criteria are highly detailed aiming to mitigate risks from all angles. We are delighted to have played a crucial role in facilitating the successful transaction of this prime plot."
Mr. Pimhataivoot further commented on Thailand's development in the sector: "Thailand has significant potential to grow as the number of data centres and the MW capacity are still behind neighbouring SEA countries such as Indonesia and Malaysia. The expanding cloud infrastructure and data storage requirements coupled with an abundance of power availability and attractive incentives from The Board of Investment (BOI) are the key factors fuelling growth for Thailand's data centre business. The Non-Tax Incentive on freehold land ownership for foreign investors from The BOI is one of the key factors triggering investment decisions for many global data centre players."
Adding perspective on the regional market, Mr. Michael Glancy, Managing Director for Thailand and Indonesia at JLL, reported, "The data centre market in Asia has experienced rapid expansion, doubling total capacity from 2,500 MW in 2022 to 5,000 MW in 2023. This substantial growth signifies the increasing demand for data storage and processing capabilities across industries in the region. In the Asia Pacific region, China has the highest number of Data Centres, totalling 448."
"Australia follows with 306 Data Centres, and Japan holds 218 Data Centres. This reflects the significant presence and investment in data Centre infrastructure within these countries while Thailand stands at only 39 Data Centres behind Malaysia at 55 DC and Indonesia at 79 DC. The potential to grow the sector in Thailand is vast especially as the digital economy continues to experience rapid growth, driven by technological innovation and strong government support for the development of digital infrastructure."
Mr. Glancy emphasised the benefits of Thailand's geographical and investment setting: "As the demand for digital services increases, Thailand's strategic location and favourable investment environment make it an ideal market for data centre operators. We are proud to be a part of significant projects which will contribute to the future of Thailand's digital landscape."
The rise of the data centre sector is contributing to increased demand for real estate, employment creation, and a boost in foreign investment in Thailand's economy. Alongside data centres, hotels, industrial and logistics properties, and healthcare represent significant asset classes fostering growth in Thailand's real estate market this year. JLL has also facilitated other major transactions, including the sale of Hyatt Regency Bangkok Sukhumvit, a notable hotel asset deal.
The ongoing appeal of these sectors is expected to continue attracting domestic and international investors, playing a pivotal role in sustaining momentum in the Thai real estate sector and wider economy well into 2025.
