Asia Pacific data centre market primed for strong growth

17 May 2023 2 min. read
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The Asia Pacific data centre market is primed for strong growth in the coming years according to JLL research, following an expected surge in the use of data services, cloud computing and artificial intelligence.

According to the JLL report, the hyperscale market, which is the combined service of all cloud providers, is poised to grow 20% from 2021 to 2026, as an increasing number of companies desire to keep up with the demand for data processing and storage requirements.

There are currently 300 new data centres in development around the globe, by the end of next year that number is expected to grow more than three-fold to over 1,000 sites. This is driven by the ever-increasing use of smartphones and social media, headlined by growth in China (938 million users) and India (467 million users).

Share of hyperscale data center capacity by region

“Asia Pacific currently makes up 26% share of global hyperscale data centre capacity in 2022. In mature markets like Singapore, Hong Kong, Tokyo, Shanghai and Sydney, we are witnessing a huge gap in capacity, and they are being bridged quickly with large new builds,” said Christopher Street, a Managing Director at JLL.

Tokyo, Hong Kong, Singapore, and Sydney remain Asia Pacific’s largest regional hubs, with a combined 3.000 MW of total inventory and 765 MW under construction, said the report. “However, enterprises are increasingly considering other hubs and edge markets, including Jakarta and Mumbai, due to growing mobile phone usage,” stated Street.

Furthermore, emerging edge markets are receiving strong interest from cloud providers and hyperscalers. “Given the region’s influence in the global economy, significant opportunity now exists in this market.”

Top 10 Hyperscalers by self-build capacity

By utilising software-driven technologies, hyperscale data centers continue to improve the intelligence and effectiveness of their operations. The rise of software-defined data centers, where all the infrastructure components – networking, storage, CPU, and security – are virtualized and provided as a service, is a visible trend in the market.

However, the growth in the data centre landscape comes with its challenges. Globally, 53% of data centre operators struggle with finding qualified candidates, and 42% face challenges in retaining staff. “For data centre users, outsourcing all their operations or hiring a third-party specialist can help mitigate labour challenges,” said Glen Duncan, Data Centre Research Director at JLL.

Along with talent, sustainability is now a top priority for data centre developers, operators and investors, including addressing energy use and emissions. Duncan: “Sustainability has been a standout theme since the pandemic. Encouragingly, many Asia Pacific businesses have embarked on sustainability programmes to deliver impact on climate action for sustainable real estate.”