This quarter, the Knight Frank Data Centre report focuses on Asia Pacific. Market analysis includes both established data centre hubs such as Singapore, Hong Kong, Sydney, Shanghai, and Tokyo; and hyper growth markets including Seoul, Mumbai, Bangkok, and Kuala Lumpur – to provide the most wide-ranging view of the region.
Underpinned by strong market fundamentals, total supply (live, phased, and under construction) grew by 488MW to total more than 8,700MW with most of this additional capacity coming from new announcements in Tokyo, Sydney, and Seoul in particular. 203MW of capacity was absorbed this quarter largely due to public cloud activity, a number significantly higher than the average 127MW per quarter as previously observed in 2021.
Tokyo experienced the greatest growth in supply in Q1 2022 from AirTrunk, Colt, and Stack Infrastructure. There were also multiple assets acquired by Gaw Capital, ESR Cayman, and local asset management company Hulic, which are planned for redevelopment into data centres that will add an approximate 63MW of capacity between them. Accompanying the supply growth was above-trend take-up, the equivalent of almost three-fourths of total capacity absorbed in Tokyo last year.
Crossing the gigawatt threshold this quarter, Sydney added 144MW of capacity to record slightly over 1 gigawatt of total supply. The market saw a busy quarter, with the ground-breaking of several facilities including Microsoft’s self-build and Macquairie’s IC3 Super West while other data centres near completion. AirTrunk also deployed 30MW of capacity at SYD2 to record 85MW of take-up during Q1, which is comparable to total take-up across the entire year of 2021 in the market.
Seoul registered significant activity this quarter, with Alibaba launching their first Availability Zone in the market in February. Aggregate supply grew by a similar amount as in Q2 2021, where the market had seen the biggest growth in supply over the last 3 years. This is due to the announcements of facilities being jointly developed by international operators and asset management companies entering the market, boosting aggregate supply by 136MW. Take-up was also higher compared to previous quarters due to Digital Realty’s 12MW facility, ICN10, that went live in January.
By contrast, market activity in Singapore has proven muted since the imposition of the moratorium on data centre developments in 2019. This, however, is expected to change imminently, with the pilot call for applications launching next quarter. Similarly, Hong Kong has been experiencing lower levels of interest and activity due to strict COVID measures.
Nonetheless, the main centres of the APAC region continue to demonstrate resilience and adaptability. The general trend is positive, with demand drivers strengthening as markets move toward a ‘living with COVID’ standpoint.