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Singapore's Data Centre Market to Surpass 1GW Milestone by 2024 but faces market share challenges

Nandhini Rad • 25/08/2023
  • Singapore currently has the greatest operational capacity of any city in Asia Pacific outside of mainland China
  • Vacancy rate remains lowest in the region. 

Singapore’s data centre market is on track to exceed 1 gigawatt (GW) in 2024 but a limited pipeline of planned and under-construction supply will see other markets overtake the city-state’s operational capacity in the coming years, according to Cushman & Wakefield’s latest Asia Pacific Data Centre Update.

The report showed that the pipeline of under-construction, planned and land-banked data centre capacity in Tokyo, Mumbai and Sydney means these three markets have the potential to join Beijing and Shanghai as ‘Powerhouse’ markets exceeding 2GW in operational capacity in the coming five to seven years, while Singapore will sit within the ‘Established’ category.

Singapore currently has around 917 megawatts (MW) of capacity in operation and 209MW either planned or under construction, making it the largest data centre market on a city basis in Asia Pacific outside of mainland China. Tokyo currently has 896MW of operational capacity with 1,436MW either planned or under construction. Mumbai’s 462MW will be supplemented by its 1,031MW pipeline while Sydney’s 724MW operations will be boosted by its 1,021MW pipeline.

Following the end of the three-year moratorium on new data centres and the establishment of new development standards, Singapore has provisionally awarded around 80MW of new capacity in a pilot initiative aimed at promoting the sustainable development and management of data centres, which could serve as a blueprint for the region in time to come. 

Cushman & Wakefield’s Executive Director, Ms. Brenda Ong, said: “Singapore continues to enable the growth of data centers to support the digital economy in a sustainable manner that is consistent with its climate change commitments.” 

Mr Wong Xian Yang, Head of Research Singapore & SEA at Cushman & Wakefield added, “While Singapore remains the key datacenter hub for Southeast Asia, tight supply conditions coupled with high demand has led operators to explore secondary markets.”

Since the advent of regulatory and land headwinds in Singapore, Johor has become the new focal point for data centre investors and operators who are seeking to remain in close proximity to the sovereign state. As a result, Johor, with its direct connection to Singapore by land via causeway, is experiencing a spillover of data centre supply that is still in nascent stages of development, compared to the operation capacity of 100MW in Kuala Lumpur but significant with over 490MW under construction and planned, and extensive land parcels being committed. 

At a regional level, data centers 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.  Five cities – Beijing, Shanghai, Singapore, Sydney, and Tokyo – account for 62 percent of the operational data center 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. 

Maturity Index extrapolates growth trajectories to provide future insights

Supplementing the company’s global annual ranking of data centre markets[1], which assesses data centre markets on their current status, the report's Markets Maturity Index 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. As an example of its application, the Maturity Index classifies Mumbai (which currently has 462MW in operation) ahead of Sydney (724MW) within the Powerhouse category after taking into account, among other factors, its under-construction pipeline of 342MW, which is the highest in APAC. 

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.

1Note to Editors
The Maturity Index is a statistical comparison evaluating markets on 21 parameters, including the IT MW capacities of each market’s operational, under construction, planned and land banked stages of development, as well as vacancy rates, the number and average size of data centres based on their status, the number of operators that have operational data centres in each market, and the number of new operators planning to enter the market. These data points are stacked into a parameter matrix and weighted to derive their overall growth score - the higher the growth score, the more evolved the market.

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