Data centre supply in secondary cities has grown by over 300% in five years.
Knight Frank, one of the largest independent global property advisors, has released the latest insights from its Q3 2022 Data Centre Report.
The report focuses on nine rapidly emerging markets in Asia Pacific – Osaka, Melbourne, Jakarta, Manila, Hanoi, Taipei, Hyderabad, New Delhi and Chennai.
Fuelled by strong market fundamentals and an increasing trend towards greater localisation of data centre facilities, total supply in these locations grew from just under 700MW five years ago, to over 3,000MW – a meteoric increase of over 300%. In the first three quarters of 2022 alone over 600MW of new IT capacity has been added.
Across the nine locations studied, Melbourne, Jakarta and Osaka stand out, with each now registering more than half a gigawatt of aggregate IT supply. Melbourne in recent years has developed into a key data centre market, with renewed interest from local and regional operators poised to add close to 450MW to existing live supply.
Jakarta has almost 400MW committed or under construction, with several major hyperscale cloud service providers advancing significant plans for self-builds in the city. Osaka continues to develop as an alternative data centre market to Tokyo, with a current live IT capacity exceeding 250MW and over 250MW in the pipeline.
In India, the data centre industry has been on a high growth trajectory, partly driven by government policies, including easier access to credit and other incentives to boost data centre investment. As a result, cities like Hyderabad, New Delhi and Chennai are registering significant data centre market growth, with circa 300MW to 400MW of IT capacity either live, committed or under construction in each location.
Fred Fitzalan Howard, Data Centre Lead APAC, said: “The insight from our latest report reinforces Asia Pacific’s position as the most exciting market in the global data centre industry. More businesses are speeding up their Digital Transformations and the demand for cloud services and lower latency has proliferated, resulting in cloud providers sourcing colocation and self-build facilities in previously overlooked cities. As these secondary cities continue to establish themselves as data centre locations, opportunities will continue to arise across the M&A and development space.”
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