Hong Kong has re-entered the ranks of the top 10 data centre markets worldwide after a one-year absence, while Singapore remains Asia Pacific’s premier server-hosting hub despite supply constraints, according to a Cushman & Wakefield report.
Singapore moved up two spots and drew even with Silicon Valley for the No.2 position in the global league table, surpassed only by Northern Virginia, as Hong Kong took second place in APAC and sixth overall, the property services firm said in its 2022 Global Data Center Market Comparison.
Hong Kong’s comeback was fuelled by a robust development pipeline, excellent networks and the availability of all major cloud services, said John Siu, Cushman & Wakefield’s managing director for Hong Kong.
“The city also retains its crown as the globally lowest taxed data centre jurisdiction,” Siu said. “As a global financial and business capital, with a long history of pro-business policies it accordingly offers a robust data centre sector.”
Eye on Supply
Siu pointed to Mapletree’s acquisition of an industrial site in Fanling for a ground-up development and ESR’s purchase of an industrial building in Kwai Chung for a wholesale conversion as proof of strong demand from data centre investors and operators in Hong Kong.
The city’s total new supply is expected to reach 5.5 million square feet (510,967 square metres) over the next five years, but the medium to long term will see shortages of land and power supply in popular data centre submarkets like Tsuen Wan and Kwai Chung.
“To support the city’s development as a world-class data centre market, it is therefore crucial for the government and power suppliers to break the bottleneck and increase land supply and power capacity into these submarkets,” Siu said.
Singapore, meanwhile, scored highly on key criteria like market size, fibre connectivity and cloud availability. With its ongoing moratorium on new facilities, the Lion City is one of the tightest data centre markets globally, with vacancy rates below 2 percent, said Brenda Ong, executive director for logistics and industrial at Cushman & Wakefield in Singapore.
“While the moratorium is expected to be lifted soon, the tight supply situation could persist, with limited new supply coming into the market,” Ong said. “Singapore faces land as well as grid constraints and has limited renewable energy options. This would be a limiting factor on new data centre supply, given the global sustainability push.”
Sydney, Tokyo and Seoul rounded out the top five in Asia Pacific, with Sydney placing eighth worldwide. Shanghai ranked eighth in APAC and retained its position as the fourth-largest global market by size, with its market capability of more than 0.6 gigawatts trailing only Northern Virginia, London and Tokyo.
Data centre construction continues to grow globally, with 4.1GW currently underway in the markets covered by Cushman & Wakefield, up from 2.9GW in the previous report and 1.6GW in the year before that.
The APAC market is growing at a “relentless pace” and is set to become the world’s largest data centre region over the next decade, the consultancy said.
“The horizon for the data centre industry across the Asia Pacific region is exceptionally bright, thanks to deep hyperscale demand and the billions of dollars in development in progress to support these key tenants,” said Kevin Imboden, Cushman & Wakefield’s senior research manager for data centre insights. “The 1.3 gigawatts under construction in the APAC markets reviewed is a small fraction of what is in planning regionally, with much action and growth coming over the next decade.”