Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

Data centres: Headroom for growth in Asia Pacific, but suitable land parcels becoming harder to find in mature markets

Trang Bui • 08/09/2023

Data centres across Asia Pacific are growing in scale and new markets are being evaluated for expansion as operators anticipate increased demand from continued digitization and wider adoption of artificial intelligence.

According to Cushman & Wakefield’s latest Asia Pacific Data Centre Update, five cities – Beijing, Shanghai, Singapore, Sydney and Tokyo – account for 62 percent of the operational data centre capacity in Asia Pacific, with Sydney and Tokyo expected to join Beijing and Shanghai in the next one to two years as cities exceeding 1 Gigawatt (GW) of operational capacity.

Emerging markets are also growing rapidly, with Indonesia, Malaysia, the Philippines and Thailand all on track to more than double [>200 percent increase] their operational capacity over the next five to seven years.

The report also shows that the scale of individual data centres is increasing. Within the top five markets, the average size of data centres under construction is up 32 percent to 20MW, from an average size of 15MW for data centres currently in operation. Across the broader Asia Pacific region, the percentage difference is even higher, with the average size of data centres under construction (14.5MW) 57 percent higher than the average size of operational data centres (9.2MW).

Maturity Index extrapolates growth trajectories to provide future insights

Supplementing the company’s global annual ranking of data centre markets1, which assesses data centre markets on their current status, the latest Asia Pacific Data Centre Update also includes a Markets Maturity Index, which classifies 29 data centre cities across four categories (Emerging, Developing, Established and Powerhouse), based on their anticipated evolution over the next five to seven years.

Our Maturity Index tracks 29 data centre markets across Asia Pacific* to compare their current maturity status as well as their evolution over the next 5 – 7 years. It is a statistical comparison that evaluates markets on 21 parameters, including the IT MW capacities of each market’s operational, under construction, planned and land banked stages of development, the summation of which is visually indicated by the size of each market’s circle on the graph.

The commonly used references to describe data centre markets as primary and secondary have been broken down further into the below four categories:

POWERHOUSE: These are the largest markets in the region in terms of IT MW capacity and have extensive supply pipeline. Beijing, Mumbai, Shanghai, Sydney and Tokyo are categorised as powerhouse with the potential to develop into >2GW-sized markets upon the full development of their supply pipeline. These 5 markets cumulatively account for more than 50% of the operational data centre capacity in Asia Pacific and about 45% of the under construction and planned capacities combined. They attract the highest demand, and therefore have low vacancy rates. Owing to the extensive development in these markets, finding suitable land parcels for further data centre development may be challenging.

ESTABLISHED: Chennai, Hong Kong, Hyderabad, Jakarta, Johor, Melbourne, Seoul and Singapore account for about 25% of the total operational capacity in the region. With the exception of Singapore, whose growth has been hindered by the recent moratorium and limited supply, all established markets are growing rapidly. Several operators are in the process of either expanding or setting up their first data centres in these markets. Typically, these markets have more land banks available for development than powerhouse markets.

DEVELOPING: The developing markets are those which may not have large data centre capacities but are of strategic importance for operators to have a presence. Bangkok, Delhi NCR, Guangzhou, Kuala Lumpur, Manila and Osaka account for less than 10% of the operational capacity in Asia Pacific. Almost 90% of the operational data centres in these markets are smaller than 10MW in size. Despite smaller data centre sizes, these markets typically have higher vacancies because the absorption rates are slower than the new supply that gets added.

EMERGING: The emerging markets are in nascent stages of maturity but have caught the interest of data centre operators owing to factors including local enterprise and retail demand, presence of landing stations, geographic prominence and hyperscale entrants amongst others. Auckland, Bengaluru, Brisbane, Busan, Canberra, Ho Chi Minh City, Hanoi, Pune, Perth and Taipei cumulatively account for only about 6% of the total operational capacity in Asia Pacific. The supply pipeline of new data centres in these markets is limited as the number of operators exploring these markets is low.

Cushman & Wakefield’s Director, Data Centres Research & Advisory for APAC and EMEA Pritesh Swamy said the Maturity Index showed that there remained plenty of development headroom in Asia Pacific compared to other regions.

“The opportunity for growth is quite significant. If we look at the US, Northern Virginia alone has around 3GW, which is one-third of the cumulative capacity across Asia Pacific, while the entire US market has almost 10GW in operational capacity. Considering that Asia Pacific’s population is around ten times greater than that of the US, we are far behind in terms of the overall capacity we may need.” - Swamy added.

Figure 1: Asia Pacific Markets Maturity Index

Asia Pacific Markets Maturity Index
Cushman & Wakefield’s Asia Pacific Markets Maturity Index charts the evolution of 29 data centre markets based on parameters including the operational, under construction, planned and land banked IT MW capacity. Note that Northern Virginia is not to scale.

Vietnam is a frontier data centre market, with only a small number of multinationals locally requiring high-level capacity. However, it is arguably among the most lacking in data centre infrastructure regionally, suggesting a major opportunity at the content provision level.

Ho Chi Minh City has deployed over half of the national live capacity and the city’s vibrant economy, increasing digitalisation, and growing demand for cloud services have contributed to the growing number of data centre developments. Vietnam’s digital economy rose 28% YoY in 2022, with a report from Google, Temasek and Bain & Company estimating that annual growth rate to continue at 31% through to 2025.

While international operators such as NTT Global Data Centers, Telehouse and GIC-backed VNG Cloud have a presence in the market, the common approach for new players entering the market is to partner with local telcos such as FPT Telecom, Viettel Group, VNPT, and CMC Telecom.

The legal framework for data centres in Vietnam has not been finalised yet, but the government is actively working on the development of clear regulations around data protection and data centre service in the country. The announcement of the new decree may affect the market in the short term but is expected to solidify the market’s information security platform in the long term.

1Cushman & Wakefield’s Global Data Centre Market Comparison report


APAC Data Centre news card image
Data centres: Headroom for growth in Asia Pacific

Data centres across Asia Pacific are growing in scale and new markets are being evaluated for expansion as operators anticipate increased demand from continued digitization and wider adoption of artificial intelligence.

Trang Bui • 08/09/2023

Cushman & Wakefield releases 2022 Environmental, Social and Governance Report

Cushman & Wakefield (NYSE: CWK), a leading global commercial real estate services firm, today released its 2022 Environmental, Social and Governance (ESG) Report.

Quynh Dang • 30/08/2023

Office and Retail update HCMC Q2 2023

The office market studied includes 18 Grade A buildings and 59 Grade B buildings in Ho Chi Minh City. For retail market data, it includes projects of commercial centers, retail podiums, general department stores but does not include commercial townhouses and front-end townhouses in Ho Chi Minh City.

Quynh Dang • 11/07/2023

Commercial Real Estate: The Decade of Asia Pacific

Recently, Cushman & Wakefield Vietnam was delighted to welcome to our HCMC headquarter many senior leaders of the group, including Matthew Bouw, Chief Executive of the Asia Pacific region. Matthew is responsible for leading 11,000 employees in 60 offices across 14 countries globally.

Quynh Dang • 14/06/2023

fit out guide
Office fit out cost in Vietnam is the second most affordable in APAC, Cushman & Wakefield

Persistent inflation, tight labour markets, and ongoing supply chain delays have increased average fit out costs across Asia Pacific, according to Cushman & Wakefield’s 2023 Asia Pacific Office Fit Out Cost Guide, but major occupiers are absorbing the higher spend in their quest to improve return-to-office rates.

Trang Bui • 05/04/2023

Vietnam WIN card image
Accelerating the advancement of women: Cushman & Wakefield’s Women’s Integrated Network celebrates 500+ members

Cushman & Wakefield has marked International Women’s Day 2023 by announcing its Women’s Integrated Network (WIN) has surpassed 500 members across Asia Pacific.

Amy Kathleen Kelly • 07/03/2023

With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All