Singapore is third-most robust data centre market: Report

Singapore is the third-most robust data centre market in the world and the most developed in South-east Asia, a report said yesterday.

It said the country jumped four spots from seventh place in 2017 to third, while retaining the top spot in the region.

The index identifies factors, such as connectivity, ease of doing business, political stability, corporate tax rates, natural disasters, energy and security, that are likely to affect data centre operations.

Singapore's rise in the index, compiled by property consultancy Cushman & Wakefield, was underpinned by the Republic's improved high-speed connectivity, political stability and low risk of natural disasters relative to the other 37 countries assessed.

"Being sheltered from natural disasters and robust infrastructure, many content operators continue to take advantage of Singapore's prime geographical location to service their regional clients in Malaysia, Indonesia and Thailand," the report noted.

Singapore has attracted a range of tech companies to set up data centres here, it added.

SINGAPORE'S ADVANTAGES

As a whole, South-east Asia as a region offers many advantages for data-centre players with a longer-term view. They will favour Singapore for its relative security to store mission critical data, and store the business-as-usual non-mission critical data in the neighbouring countries.

MS CHRISTINE LI, Cushman & Wakefield's head of research for South-east Asia.

Facebook is investing about US$1 billion (S$1.4 billion) to build a centre slated to open in 2022. Equinix, Digital Realty, ST Telemedia and at least two other operators have secured land plots from JTC Corporation to build data centres, said the report.

Cushman & Wakefield estimates the rapid pace of digitalisation and a surge in demand for cloud-based services will make South-east Asia the fastest-growing region for co-location data centres over the next five years.

"Major corporates such as Google, Alibaba Group and Amazon Web Services have expanded their cloud infrastructure footprint to facilitate their respective expansion plans over the last few years, and momentum is expected to continue," it noted.

"The progressive roll-out of 5G networks across the world is expected to fuel demand for data centres. A 5G network... would spur massive consumption of data and unlock new capabilities such as self-driving cars that require a constant connection.

"Singapore is one of the early adopters of 5G, and is on track to roll out 5G mobile networks by 2020."

North America is the largest co-location data centre by market size at US$17.2 billion, but the Asia-Pacific region is expected to take over the top position by as early as 2021.

The total market size for Asia-Pacific co-location data centres is forecast to be around US$28 billion by 2024, larger than the US$23.4 billion market size of North America, the report said.

Said Ms Christine Li, Cushman & Wakefield's head of research for South-east Asia: "As a whole, South-east Asia as a region offers many advantages for data-centre players with a longer-term view.

"They will favour Singapore for its relative security to store mission critical data, and store the business-as-usual non-mission critical data in the neighbouring countries."

A version of this article appeared in the print edition of The Straits Times on August 20, 2019, with the headline 'S'pore is third-most robust data centre market: Report'. Print Edition | Subscribe