DCP (Data Centre Pricing) provides an overview of the 11 key Data Centre markets in the Asia Pacific region, based on recent research completed in the DCP Cloud & Data Centre Markets Asia Pacific report from 2021 to 2025 - published in late 2020.
The Chinese market remains the second largest Data Centre market in the world after the US and is also influencing the Hong Kong market with the creation of the GBA (Greater Bay Area). But there is a range of new Data Centre investments also being made in Australia, Japan and South Korea, with Australia accounting for a tenth of Data Centre space as of the start of 2021. A breakdown of Data Centre space across the Asia Pacific region shown in the Pie Chart in Figure 1 below:
Figure 1 – A pie chart showing the forecast breakdown of Data Centre raised floor space in m2 by the 11 Country Markets as a percentage as of the beginning of 2021 (Source: DCP)
After China the largest Data Centre markets in Asia include Japan, Singapore, Australia and Hong Kong all of a similar size (with Data Centre raised floor space typically of 300,000 m2 to 400,000 m2 in total).
Singapore has become the central hub location for companies investing in South East Asia - including both digital companies and Data Centre Providers.
The smaller Data Centre markets are poised for higher growth rates - with South Korea, Thailand, Vietnam & Taiwan forecast to have the highest increase – with South Korea outstripping the other markets.
Below DCP considers the key Asia Pacific markets in alphabetical order below:
Australia has seen significant growth in new Data Centre capacity and investment and has an 11 per cent share of the Asia Pacific market. It has benefitted from the availability of land for development and has grown rapidly. In a survey of the Asia Pacific region by DCP Australia is identified as being a key region for development with Digital Realty announcing the development of two new large Hyperscale Data Centre facilities in the Sydney area.
Mainland China has become the second largest Data Centre market in the world (behind the USA) and accounts for 43 per cent of the Asia Pacific Data Centre market by space as of the beginning of 2021.
Hong Kong accounts for 8 per cent of the Asia Pacific Data Centre market. Hong Kong will see new developments to be launched by AirTouch, Global Switch, i-advantage, GDS Holdings Ltd & Digital Realty. But a shortage of land suitable for Data Centre use is a constraint on future growth. New space is being developed near the Chinese border as Hong Kong becomes more integrated into nearby China & Macau as part of the GBA (Greater Bay Area).
Indonesia accounts for 3 per cent of the Asia Pacific Data Centre market. Despite the population size of Indonesia, with over 270 million people as of 2020, Indonesia remains small in third-party Data Centre terms of raised floor space as of the beginning of 2021.
Japan accounts for 11 per cent of Asia Pacific Data Centre space. Japan remains an established Data Centre market with inward investment by MC Digital Realty, Colt and Equinix.
Malaysia accounts for 4 per cent of the Asia Pacific market. The Malaysia Data Centre market has experienced steady growth but remains a much smaller market than for neighbouring Singapore.
Singapore accounts for 10 per cent of Data Centre space in the Asia Pacific region. Singapore has established itself as the major Data Centre hub in the Asean Region.
South Korea accounts for 4 per cent of Data Centre space in the Asia Pacific region. South Korea is expanding with inward foreign investment.
Taiwan accounts for 2 per cent of third-party Data Centre space in the Asia Pacific Region, and remains one of the smallest markets dominated by Telecoms Provider Data Centre capacity.
Thailand accounts for 2 per cent of third- party Data Centre space in the Asia Pacific Region.
Vietnam accounts for 2 per cent of Data Centre space in the Asia Pacific Region.
Forecast overall Asia Pacific FData Centre growth
DCP forecasts the increase in Asia Pacific Data Centre space – shown by CAGR (Compound Annual Growth Rate) by Country market - shown in the chart in Figure 2 below:
Figure 2 – A chart showing the Data Centre Asia Pacific space growth rates in CAGR per annum from the beginning of 2021 to the beginning of 2024
Source: DCP (from the Cloud & Data Centre Markets in the Asia Pacific Region report)
Conclusions & the Key Data Centre Trends in the Asia Pacific Region
Data Centre Providers in the Asia Pacific Region are among the fastest growing in the world – In China the quoted Data Centre Providers 21vianet Group & GDS Holdings have reported annual revenue growth rates of 27.4 per cent and 38.4 per cent year on year for Q4 2020. By contrast US quoted Data Centre Provider REITs Digital Realty & Equinix reported revenue growth rates of 8 per cent and 35 per cent (boosted by the acquisition of Interxion) year on year for the same period.
The Asia Pacific Region is receiving more inward Data Centre investment – The US REITs Digital Realty & Equinix have both made large investments in Australia, Japan, Hong Kong & Singapore – and both companies are in the process of opening a Data Centre facility in Seoul (South Korea). Equinix has regularly bolstered its market position by acquiring local Data Centre Providers, in Australia (Metronode) and Japan (bit isle). For example, Digital Realty is in the process of opening new hyperscale facilities in Australia, Japan (Osaka & Tokyo), Hong Kong, Singapore & South Korea.
South Korea is forecast to grow the most of the 11 countries profiled – A flood of new investment in Data Centre capacity is taking place in South Korea. Investment in new Data Centre capacity from Actis Capital, Digital Edge, Digital Realty, Equinix & STT GDC is to boost the South Korean Data Centre space growth rate to over 15 per cent per annum to 2025 as the country starts to catch up with Japan in terms of space availability.
China remains both the second largest Data Centre market in the world - and is the fastest growing Data Centre market of its size worldwide. Chinese Data Centre Providers 21vianet Group and GDS Holdings both report annual revenue growth in excess of 25 per cent, although other Data Centre Providers are reporting revenue growth that is less than the Chinese market, with Australian Data Centre Provider NEXTDC reporting 13 per cent growth for the year to the end of H1 2020.
The public CSP market in the Asia Pacific Region is also set to drive growth for Data Centres – DCP forecasts that public cloud revenue in the region is set in increase by 4 times more than Data Centre revenue over the 4 year period to the beginning of 2025. But the continued growth in cloud usage will also result in more Data Centre investment as many third-party Data Centre facilities are being used as cloud or content hubs in Singapore, Hong Kong, Australia and Japan.
A key determinant of Data Centre growth in the Asia Pacific Region is the ease of inward investment – With the exception of China the Countries that have seen investment by international Data Centre companies or investors (including Singapore, Hong Kong & now South Korea) have seen the most build out of new Data Centre capacity in the Asia Pacific Region.
The DCP Cloud & Data Centre Markets Asia Pacific report can be purchased in its entirety or per country market. The cost of a single user licence for the complete report is GBP £1,995, further information can be found on the DCP website.