A recent research by CBRE reported that Singapore, the largest data centre market in this region, will remain as a tenants’ market because of ample supply.
The CBRE report titled ‘Asia Pacific Data Centre Trends Q1’, said the region’s data centre market continues to expand. Colocation supply across the ten Asia Pacific markets covered by CBRE Data Centre Solutions Services totalled of 1,772 MegaWatts (MW) in Q1 2019.
Demand is predominantly coming from large technology and global cloud corporates from the U.S. and China, ensuring fitted capacity remains tight across the region, said the report.
“The pipeline is totaled for about 800 MW which will help to ease the tight availability over the past few years. Nonetheless, Singapore, the largest data centre market in this region, will remain as a tenants’ market with the ample supply.”
The report noted that with 20 submarine cable systems landing, Singapore is the best connected tier I market in Asia Pacific. It added that strong connectivity along with reliable power supply sources has helped Singapore become not only the largest data centre market in this region, but also a data centre hub.
“The city-state’s conducive business environment has also allowed the data centre industry to flourish and created a highly competitive market. The presence of reputable international and local operators with strong track records has ensured end users have greater leverage and options for their deployments.”
Take-up and demand in the largest data centre market in this region
CBRE said that large-sized technology and cloud companies have been the major demand drivers, displaying large and unprecedented requirements and accounting for a significant amount of colocation space in the last 18 months. A colocation data centre is a standalone building in which multiple companies share space for storing and running their IT equipment, akin to a multi-tenant office building or apartment complex.
A Hyperscale Colocation typically denotes large power requirements (>500 kilowatts, kW) but end-user is specifically a cloud or large tech company with requirements for scalable power, storage, and cooling; whereas wholesale colocation typically denotes large power requirements (>500 kilowatts, kW).
CBRE said in its report that it only tracks carrier neutral colocation markets which excludes non-carrier neutral facilities, system integrators and self owned facilities (including the hyperscale cloud).
Supply in the largest data centre market in this region
CBRE expects significant new supply to enter the market in the next three years, with an estimated pipeline of 177.2 MW, equivalent to around half of existing supply.
Pricing in the largest data centre market in this region
The research said that Singapore will remain an end-user market over the next 24 months due to its ample pipeline. However, data centres with strong connectivity will still be able to command premium rents for retail colocation requirements, the research added.
The report on Asia Pacific Data Centre Trends comes after CBRE launched a specialist service for investors who want to buy into data centers. The new Data Center Capital Markets practice, will be led by a newly-appointed SVP: Kristina Metzger, who comes to the job after nine years at CBRE’s Data Center Solutions division, a real estate team which handles data center consulting, brokerage, project management, and operations. As a data center tenant advisor, she worked with AT&T, American Express, Boeing, Broadcom and others.
The move comes in response to huge demand for data center investments: CBRE says there was more than $12 billion invested in North American data centers in 2018, and “capital availability remained abundant throughout the year.”
“Demand for data center investment has never been greater as aggressive foreign capital, institutional investors and infrastructure funds have started targeting the asset class. As many of these groups enter the space, they are targeting direct investments and also joint ventures, recapitalizations, and the outright purchase of data center operating companies. There have never been more creative solutions to capitalize data center transactions than there are today,” Metzger said.
The new business will be complementary to CBRE’s existing Data Center Solutions business and CBRE Capital Advisors, the company’s North American investment banking business, CBRE says.
“Kristina is a nationally recognized data center expert with deep client relationships and is well qualified to drive our capital markets in this space to the next level,” Chris Ludeman, global president of capital markets at CBRE, said. Metzger will run the practice from San Diego,
CBRE also has a valuation and advisory service for data centers based in Chicago, led by Christopher Fudacz.
How to Secure a Commercial Loan Quickly
Are planning to purchase properties for investment in the the largest data centre market in this region but unsure of funding? Don’t worry because iCompareLoan mortgage brokers can set you up on a path that can get you a commercial loan in a quick and seamless manner.
Alternatively you can read more about the Best Commercial Loans in Singapore before deciding. Our brokers have close links with the best lenders in town and can help you compare Singapore commercial loans and settle for a package that best suits your commercial purchase needs.
Whether you are looking for a new commercial loan or refinance, our brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the loan. And the good thing is that all their services are free of charge. So it’s all worth it to secure a loan through them.
To speak to our Panel of Property agents.
For advise on refinancing advice.
Parc Botania: A Silent Haven Surrounded By Lush Greenery Next Post:
Funding homes for life is the aim of new CPF rules