SINGAPORE (THE BUSINESS TIMES) - Singapore is one of the top ideal markets for data centres across the globe, recent reports showed.
The Arcadis Data Centre Location Index 2021 ranked Singapore the second most attractive city to build data centres, out of a total of 50 cities. Meanwhile, Cushman & Wakefield's 2021 Global Data Centre Market Comparison report ranked Singapore's data centre market fifth out of 48 markets in total - advancing one rank from a year ago.
In Arcadis' report, the local market was recognised for its ability to attract major investments from the technology industry, thanks to a well-educated workforce and stable government, making it a "natural co-location hub for serving markets across South-east Asia and India".
To add, while the challenges that Singapore faces include the availability of renewable energy sources and land scarcity, Mr Richard Warburton, Arcadis' client development director in Singapore, highlighted solutions that are currently being evaluated in the market, such as floating and submersed data centres.
Other solutions include the use of photovoltaic installations, as well as cold energy release from liquefied natural gas and hydrogen cells for on-site power generation.
"The ability to implement robust renewable energy solutions will be key to Singapore maintaining its regional hub position and to meet the ongoing surge in demand," said Mr Warburton. He added that on top of renewable energy solutions, lowering the actual energy consumption of data centres will also be key.
Clinching a score of 76.86 out of the maximum 100 points - coming in just behind the United States, which had a score of 77.86 points - Singapore also ranked well in areas such as the price of electricity, global cyber security and mean download speed.
However, it scored relatively poorly on energy security and domestic market size, making it "heavily reliant on good relations with its neighbours".
Arcadis' index ranks 50 of the world's key established and emerging markets based on their performance across eight criteria: gross domestic product per capita, dealing with construction permits, price of electricity, energy security, cyber security, domestic market size, the number of mobile broadband subscriptions and mean download speed.
The final index value is a sum of weighted scores collated from publicly available sources, which were then normalised on a scale of 0 to 100 based on World Bank methodology.
At the same time, Mr Dave Fanning, executive managing director and data centre advisory group leader at Cushman & Wakefield, noted that despite the ongoing local moratorium imposed by the Singapore Government, the market's existing presence, dense fibre and array of available services continue to make it an attractive data centre destination.
The Business Times earlier reported that a moratorium on constructing new data centres had been "implicitly imposed" since early 2019.
Cushman & Wakefield's study evaluated 1,189 data centres in 48 global markets, scoring each data centre across 13 weighted criteria in three categories: real estate and physical considerations, ecosystem advantages, and political and regulatory review. Each metropolitan area was then assigned an overall market score.
Under the real estate and physical considerations category, Singapore emerged top 10 among the development pipeline and absence of environmental risk criteria.
Meanwhile, for ecosystem advantages, the local market was recognised for offering access to the three major global cloud services (Amazon Web Services, Microsoft Azure and Google Cloud), as well as for having a large market size and a smart city framework.
Lastly, under the political and regulatory review category, Singapore was among the top 10 markets that offered lower taxes, suggesting a friendlier business climate.
Mr Todd Olson, Cushman & Wakefield's Asia-Pacific data centre advisory group leader, said that the Asia-Pacific data centre market continues to perform well as a data centre destination because of its overall growth potential and the rapid development of technology platforms and networks across many of its markets.
Data centre market growth is expected to intensify in the region, with secondary markets gaining prominence, he added.
But, as other markets continue to grow, Mr Fanning said it is still imperative for Singapore to find solutions for future development. This could be through new forms of power generation or further multi-storey construction for the limited number of remaining development sites.