This article was licensed through Dow Jones Direct. The article was originally published on Business Times Singapore.The data-centre market in Singapore is on track to exceed one gigawatt (GW) in 2024.
However, because of a limited future supply of such facilities, other markets will overtake its operational capacity in the coming years, said Cushman & Wakefield in its latest Asia-Pacific Data Centre Update.
Outside mainland China, Singapore now has the largest data-centre market on a city basis in the Asia-Pacific, with around 917 megawatts (MW) of capacity in operation, and 209MW either planned or under construction.
In a statement on Friday (Aug 25), the commercial real-estate services firm noted that the pipeline of under-construction, planned and land-banked data-centre capacity in Tokyo, Mumbai and Sydney all exceed 1GW.
The speed at which these three markets have grown puts them well on the way to joining Beijing and Shanghai as “Powerhouse” markets, with operational capacities exceeding 2GW in the coming five to seven years.
Singapore, in contrast, will sit within the “Established” category, its growth having been hindered by a three-year moratorium on new data centres imposed in 2019.
The vacancy rate in Singapore’s market is the lowest, at 1.65 per cent, due to limited new supply and a consistent growth in demand. The vacancy rate is 8 per cent in Tokyo and 19 per cent in Mumbai.
Wong Xian Yang, head of research for Singapore and South-east Asia at Cushman & Wakefield, said: “While Singapore remains the key data centre hub for South-east Asia, tight supply conditions, coupled with high demand, has led operators to explore secondary markets.”
Johor, with its proximity to Singapore and established transport links, has benefited from a spillover of data-centre demand from investors and operators wishing to be near Singapore. The southern Malaysian state has more than 490MW of capacity either planned or under construction, and has extensive land parcels being committed to the development of new data centres.
With Singapore’s three-year moratorium having ended last year, and the establishment of new development standards, the Republic now puts great emphasis on sustainability in the building of new facilities.
It has provisionally awarded around 80MW of new capacity in a pilot initiative aimed at promoting the sustainable development and management of data centres, which could serve as a blueprint for the future growth of this sector.
“Singapore continues to enable the growth of data centres to support the digital economy sustainably, and which is consistent with its climate-change commitments,” added Cushman & Wakefield’s executive director, Brenda Ong.
Across the Asia-Pacific, Cushman & Wakefield expects data centres to continue growing in scale and expanding into new markets, with increasing demand from continued digitalisation and wider adoption of artificial intelligence.
