A rendering of AirTrunk’s 150-megawatt data centre in Johor Bahru
August 24, 2023 - Data centre operators in Asia Pacific are turning to the region’s emerging markets for expansion as a dearth of land parcels and available power creates headwinds in mature locations, according to a report by Cushman & Wakefield.
Indonesia, Malaysia, the Philippines and Thailand are all on track to more than double their operational capacity over the next five to seven years, the consultancy said in its Asia Pacific Data Centre Update. Malaysia’s Johor and Indonesia’s Jakarta are each poised to exceed 500 megawatts of operational capacity in the next few years, bringing them closer to regional powerhouses Beijing, Shanghai, Singapore, Sydney and Tokyo — cities that together account for 62 percent of APAC’s current operational capacity.
Significant land banking in mature markets and growing data consumption are leading operators to explore secondary markets, said Pritesh Swamy, Cushman & Wakefield’s director of data centre research and advisory for APAC and EMEA.
“The potential capacity of land banks in some mature markets is greater than the combined total capacity of both under-construction and planned pipelines,” Swamy said Thursday in a release. “While it could take more than 10 years to develop these land banks, operators have started to explore other locations.”
Room to Grow
Cushman’s Maturity Index, which rates data centre cities based on their anticipated evolution over the next five to seven years, shows that plenty of development headroom remains in APAC compared with other regions, Swamy said.
“The opportunity for growth is quite significant,” he said. “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.”
In the index’s powerhouse category, Beijing leads all Asian cities with 2,773MW of IT capacity across operational, under-construction, planned and land-banked facilities, followed closely by Tokyo’s 2,674MW.
Interestingly, the gauge places Mumbai (2,120MW) ahead of Sydney (2,030MW) and just behind Shanghai (2,170MW), owing to the Indian megacity’s under-construction pipeline of 342MW — the largest in APAC.
Singapore, newly emerged from a three-year moratorium on new data centres, is set to become the next 1GW-plus market in 2024 with its 83MW currently under construction. The city-state’s operational capacity of 917MW already leads all APAC markets outside of mainland China.
Hyperscaling Up
Cushman’s report revealed that the scale of individual data centres in APAC is on the rise. Within the top five markets, the average size of under-construction facilities is 20MW — up from an average of 15MW for data centres currently in operation.
Across the broader Asia Pacific region, data centres under construction average 14.5MW in planned capacity, or 57 percent higher than the average of 9.2MW for operational data centres.
Some of the biggest projects under construction are by Australian hyperscale specialist AirTrunk, which is developing 408MW of total capacity in Japan, 150MW in Johor and 123MW in Sydney.
According to Swamy, cities with populations exceeding 1 million are 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,” he said.
