Sydney and Singapore have been ranked among the top ten data center markets globally, according to Cushman & Wakefield’s 2021 Global Data Center Market Comparison report. Sydney featured as the biggest mover in overall rankings, moving up to third, while Singapore moved up one position to fifth.
Todd Olson, APAC Data Center Advisory Group Leader said, “Asia Pacific markets continue to perform well as data center destinations given its overall growth potential and the rapid development of technology platforms and networks across many of its markets. As e-commerce continues to flourish and cloud connectivity becomes a primary business driver, we expect the data center market growth to intensify in the region with secondary markets gaining prominence and new markets emerging in this space.”
Cushman & Wakefield’s study evaluated 1,189 data centers around the world, utilizing a unique weighted methodology to rank 48 global markets to arrive at the overall Top Ten markets.
|
GLOBAL RANK |
CITY |
|
1 |
Northern Virginia |
|
2 |
Chicago |
|
3 |
Sydney |
|
4 |
Silicon Valley |
|
5 |
Singapore |
|
6 |
Dallas |
|
7 |
London |
|
8 |
Seattle |
|
9 |
New York / New Jersey |
|
10 |
Amsterdam |
“The 2020 pandemic accelerated the change in corporate IT strategy, as companies rapidly shifted to the cloud. Continuation and optimization of this shift will continue throughout the next several years, creating further emphasis on cloud services availability and connectivity across platforms,’ said Dave Fanning, Executive Managing Director, Data Center Advisory Group Leader at Cushman & Wakefield. “Construction of new product has skyrocketed, with the 1.6 GW under construction across markets studied last year swelling to 2.9 GW in this year’s edition.
Secondary markets continue to grow in importance, with areas particularly in Europe and Asia gaining interest as some workload move to the edge. These secondary locales often provide greater margins for data center operators, with some growing to primary market status in the future. In Asia Pacific in particular, markets like Chennai and Kuala Lumpur are receiving interest from operators and hyperscalers alike.
Sydney, labeled as an emerging market and alternative in last year’s ranking, moved drastically up the overall rankings to third place, capping off a year of major new development announcements and an ongoing transformation of much of Australia’s government IT infrastructure. The business capital of Australia is a key location for initial in-country cloud deployments and enjoys robust regional connectivity.
Although Singapore and Amsterdam both have tempered data center development via local moratoriums, both still finished in the top ten, a testament to their strong existing markets, dense fiber, and array of available services. As other markets continue to grow, it will remain imperative for both markets to find solutions for future development, potentially through new forms of power generation or further multi-storey construction for the limited number of remaining development sites.
Of the new markets introduced this year, Seoul received the highest overall score, marking an impressive debut for a long-overlooked data center market. Although considered a secondary market, Seoul has 325 MW of capacity, a solid development pipeline, and all major cloud services available.
In Korea, the recent growth of data center related industries such as 5G and OTT has led to increased demand for data centers by global companies providing cloud services such as MS and AWS, but supply of data centers in Seoul is limited due to power and land difficulties.
Market demand: The recent growth of the OTT industry and the growth of the 5G industry have led to increased data-related demand, which has led to rapid growth in data center demand.
Note: OTT Market Growth - CAGR: 28.1% as of 2014 (source from Korea Communications Commission); 5G Traffic Growth - Approximately 1,300% growth from 5,938TB to 152,279TB (source from Ministry of Science and ICT) in April 2019
Power acquisition: The government monopolizes the power essential to data center development, which prevents individual business consultations, and therefore prevents the power generation and infrastructure from being built upon user requests, allowing only planned power to be used on existing land. In addition, there are many difficulties in securing power due to limited information such as availability of power and confirmation of supplyable power.
Land security aspects: Housing demand and prices in Seoul have been growing at a steep pace in recent years. Therefore, in order to secure a site where data center development is possible in Seoul, it is necessary to compete with housing businesses for purchase. Even if it is assumed that the site for data center development has been secured in bidding competition with housing operators, it is difficult to secure land due to relatively limited licensing compared to housing.
As a result, datacenter operators who understand this market situation are changing their business strategy to 1) secure a site that can secure electricity and 2) conducting physical reviews such as data center business feasibility and connectivity with nearby data centers.
About Cushman & Wakefield’s Data Center Advisory Group
Cushman & Wakefield’s Data Center Advisory Group is a global team of elite professionals delivering specialized real estate solutions for mission critical users, owners, and environments. With scalability, reliability, and security as a driving force, our highly knowledgeable and responsive professionals guide clients to make effective financial decisions. Our expertise includes colocation leasing, hyperscale and enterprise site selection, cloud and hybrid IT strategy, and merger and acquisition advisory services. We lend additional value through our understanding of global dynamics and their impact on local markets.
