Singapore ranked sixth globally for data-centre market competitiveness

/ EdgeProp Singapore
January 31, 2020 8:06 AM SGT
Singapore scores among the top five in development pipeline and lowest environmental risk, two of 12 factors used to rank data-centre market attractiveness (Shutterstock)
SINGAPORE (EDGEPROP) - Singapore has emerged sixth in terms of data-centre market competitiveness, in a global ranking by real estate consultancy Cushman & Wakefield (C&W). Singapore scores among the top five in development pipeline and lowest environmental risk, two of 12 factors used to rank data centre market attractiveness.
Markets with a strong development pipeline indicate an excellent indicator of market quality, with the industry deploying capital on the expectation of growth, says C&W in the ranking report. In this case, Singapore’s undersea cables and strong business climate have attracted developers to keep building up.
The largest pipelines under active development that currently exist (powering over 140 megawatts) are in traditional powerhouse markets, with good connectivity and a positive reputation among potential tenants, states C&W. These markets include Singapore, northern Virginia, London, Dublin and Silicon Valley. Currently, Singapore’s toughest challenge in expanding its pipeline is its extreme land scarcity.
Source: Cushman & Wakefield Research
Meanwhile, markets with a low environmental risk have a low risk of being affected by disasters such as earthquakes, tornadoes and hurricanes. This in turn ensures continued operations and clients’ peace of mind. Singapore, as a key business hub in Southeast Asia, faces low risk of natural disasters.
“Even when facing daunting natural disasters that down other business verticals, networks must stay functional, data must keep moving, and disaster recovery must be available if all else fails,” C&W finds. Other cities that score high on this include Dublin, Madrid, Paris and Vancouver.
Out of 38 gateway cities ranked in the report, northern Virginia clinches first place. The factors of large market size, robust fibre connectivity, strong cloud availability, deep development pipeline, and low vacancy (implying strong demand) pushed the current and longtime largest data-centre market to the top. This is followed by other well-established US markets, for similar reasons, in the second to fifth positions – Silicon Valley, Dallas, Chicago, and New York/New Jersey.
Source: Cushman & Wakefield Research
Singapore, Amsterdam and Los Angeles trail behind the US cities in sixth to eighth positions, each facing challenges on permitting and development. All three markets are in constant demand, yet have limited physical room for additional construction.
Seattle and London take the ninth and 10th places, respectively.
Source: Cushman & Wakefield Research
C&W notes that although the top three markets received considerably higher scores than their respective contenders, the other 12 cities that trailed behind were separated by lower scores. This therefore “represents a new shift toward key secondary areas fast becoming primary markets around the globe”, it states, forecasting that the top 15 global markets will remain “extremely competitive”.
Source: Cushman & Wakefield Research
Sydney is expected to be one of the emerging data-centre markets, enjoying “massive growth” in the sector, although this has been tempered somewhat by the recent wildfires. A Gartner study has found that there was a 20% jump in public cloud spending in 2019 by Australian companies, and similar large increases are predicted for the next two years. This is faster than the global average, according to C&W, and indicates a desire by local firms to modernise their computing capabilities.
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