Bookmark & Share
Given its strong network infrastructure, connectivity to the region’s major markets, political stability and conducive business environment, Singapore has emerged as a favoured destination to set up a data centre.
In fact, the city-state’s colocation market generated about $1.3 billion in 2017 and was forecasted to increase 13 percent year-on-year in 2018, based on Structure Research’s 2017 Singapore Data Centre Supply report. Singapore’s market is projected to stand at $2 billion by 2021, representing a 12 percent compound annual growth rate (CAGR).
Data from Structure Research indicated that there were 33 data centre providers in Singapore covering a total space of 2.6 million sq ft during the fourth quarter of 2017.
“We estimate that around 0.7 million sq ft of data centre space on a gross area basis would have been completed in 2018,” said Tricia Song, Colliers International’s head of research for Singapore. “We expect this total stock to more than double by 2022 with another 3.8 million sq ft known supply pipeline, including Facebook’s 1.8 million sq ft data centre in Tanjong Kling which is scheduled to complete in 2022.”
Despite the growing demand for data centres, operators in Singapore are faced with land scarcity issues and zoning restrictions, reported Singapore Business Review.
“Data centres need to be at a B2 zoning area which are areas intended to be used for large industry, warehouse, utilities and telecommunications,” explained Tan Boon Leong, executive director and head of industrial services at Knight Frank Singapore. As such, Tai Seng houses the greatest concentration of data centres since buildings there are better suited for data centres.
And since 90 percent of Singapore’s industrial land is owned by Jurong Town Corporation, not every site can be used for data centre. “If JTC does not allow a data centre to be located at a certain area or building, there’s nothing that can be done,” noted Tan.
“The costs of construction, maintenance and utilities in Singapore are also amongst the highest in Southeast Asia, potentially raising the total costs for operators to set up data centres in Singapore,” said Song.
But despite the higher land cost, the city-state remains unrivalled as the top data centre hub in Southeast Asia.
And should Singapore be unable to meet the hyperscale cloud demand, companies are expected to look elsewhere in Southeast Asia for solutions.
“Opportunities are emerging in developing colocation markets such as China and India,” said Tom Duncan, CBRE Asia Pacific’s executive director for data centre solutions.
“Zooming into Southeast Asia, the main emerging market at the moment is Jakarta but it will take some time before it can be considered a significant challenger since it requires considerable additional investment in the sub-sea cable network,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
Related Articles:
Facebook to build $1.4b data centre in Singapore
More investors enter Asia Pacific’s data centre sector
Mapletree upgrading Tai Seng Drive facility into $95m data centre