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Growth opportunities in data centre sector to be led by demand from emerging regional markets: JLL

/ EdgeProp Singapore |

February 3, 2021 4:52 PM SGT

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SINGAPORE (EDGEPROP) - The market for Asia Pacific data centre real estate is poised to enter a new cycle of growth that will be led by demand from the region’s larger emerging markets, according to a report by JLL. The sector has seen investor and operator activities from mainland China, India, and Indonesia grow significantly over the past few months.

The international consultancy says that surging internet usage and smartphone adoption, coupled with social media, e-gaming, video streaming, and big data applications, are fuelling requirements for extra data centre capacity across the Asia Pacific region. JLL expects the demand for data centres in the region to grow exponentially on the back of a growing consumer mobile internet market.

Read more: Singapore ranked sixth globally for data-centre market competitiveness

The market for hosting, storage, and computing cloud services is also expected to be worth USD$163 billion ($217 billion) by the end of this year, jumping 30% in four years. Meanwhile, Internet cloud traffic is also expected to grow by more than 150% over the same period, says JLL.

“The sheer scale of growing data consumption makes data centre infrastructure a compelling global and regional opportunity for both investors and operators. There are clear opportunities across the Asia Pacific data centre sector, in both emerging and mature markets,” says Bob Tan, senior director, Alternatives, Capital Markets, JLL.

JLL says that the data centre markets in mainland China, India, and Indonesia are currently underserved by existing supply but are facing strong demand from local and international operators.

Looking ahead, conditions governing market entry, such as water and fibre network availability, the role of renewable energy, and market dynamics will continue to be key occupier and investor themes beyond 2021. Many operators looking to expand into new and emerging markets will also choose to partner with local developers in joint ventures for development and operation, says JLL.

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