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Singapore’s rise in the index comes on the back of its political stability, low risk of natural disasters and improved high-speed connectivity relative to other countries.
Singapore emerged as the third most robust data centre market in the world, up from seventh place in 2017, while retaining the top spot in the Asia Pacific region, revealed a Cushman & Wakefield report.
The index considers competitive factors such as ease of doing business, corporate tax rate, natural disaster, security, connectivity, political stability and energy that would likely affect the data centre’s operation.
Singapore’s rise in the index comes on the back of its political stability, low risk of natural disasters and improved high-speed connectivity relative to other countries.
“Being sheltered from natural disasters and robust infrastructure, many content operators continue to take advantage of Singapore’s prime geographical location to service their regional clients in Malaysia, Indonesia and Thailand,” said Cushman & Wakefield.
The report noted that the city-state has attracted several tech companies to set up data centres here.
Facebook put up its US$1 billion (S$1.3 billion) data centre in the country, which is its first in Asia and 15th across the globe. ST Telemedia, Digital Realty and Equinix and at least two other operators have also successfully tendered for parcels of land from JTC to build data centres.
Cushman & Wakefield expects Southeast Asia to be the fastest growing region for co-location data services in the next five years, given the rapid pace of digitization within the region as well as the surge in demand for cloud-based services.
In fact, major corporates such as Amazon Web Services, Alibaba Group and Google have expanded their cloud infrastructure footprint to facilitate their expansion plans over the last few years and momentum is seen to continue.
The continued roll out of 5G networks globally is also expected to spur demand for data centres. This comes as 5G network “spur massive consumption of data and unlock new capabilities such as self-driving cars, cloud gaming and a thriving ecosystem of smart appliances that require a constant connection”.
The report noted that Singapore is one of the early adopters of 5G network and “is on track to roll out 5G mobile networks by 2020”.
While North America is currently the biggest co-location data centre by market size, Cushman & Wakefield expects the Asia Pacific region to overtake it by 2021.
“The total market size for Asia Pacific co-location data centres is forecast to be around US$28 billion by 2024, 20 percent higher than the US$23.4 billion market size of North America.”
And while Southeast Asia as a region offers various advantages for data centre players with long-term view, Cushman & Wakefield head of research for Southeast Asia Christine Li expects them to favour Singapore due to its “relative security to store mission critical data and store the business-as-usual non-mission critical data in the neighbouring countries”.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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