Post on 04-Aug-2018
transcript
“Data centres are the core infrastructure on which the
digital economy runs. As Singapore journeys to
a Smart Nation, it will require more uses of and reliance on data centres for areas such as cloud services, data analytics
and the Internet of Things.”
IDA SINGAPORE | 11 MAY 2015 ©2016 Cushman & Wakefield
NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IS MADE TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN, AND SAME IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS, CHANGE OF PRICE, RENTAL OR OTHER CONDITIONS, WITHDRAWAL WITHOUT NOTICE, AND TO ANY SPECIAL LISTING CONDITIONS IMPOSED BY THE PROPERTY OWNER(S). AS APPLICABLE, WE MAKE NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY (OR PROPERTIES) IN QUESTION.
Data Centres: The New Frontier
Despite the across-the-board pessimism in the
real estate industry, data centres (DCs) seem to
be one unique segment that is booming with
lots of optimism. Singapore currently has the
largest data centre market in the Asia Pacific
region (even larger than UK, which is the biggest
market in Europe), owing to several attributes
which make it a conducive host country for data
centres. These include advantageous geographic
location, safe and dynamic business environ-
ment, stable power supply, and support from the
government. Singapore is also spared from nat-
ural disasters such as earthquakes and typhoons
which affect many neighbouring countries.
Based on C&W’s data, there is approximate-
ly 248.5 MegaWatts (MW) of IT power supply
collectively in Singapore’s data centres. Out of
which, 163 MW has been utilised, 55.1 MW has
been earmarked for future expansion and 30.4
MW is currently available. In addition, there will
be 115.9 MW of supply across seven DC new
facilities by December 2016 islandwide (with
additional two DC facilities being planned with
no specific timeline). This represents a whopping
46.6% of the total current stock by MW, which
presents an ideal scenario for tenants seeking
better quality DCs or migrating from ageing
facilities due to competitive pricing. Despite this
new wave of supply of DC facilities, operators
Data Centre Colocations Capacity: Regional Distribution
Colocation Revenue 2014 TOTAL
$963M(in USD)
Source: Structure Research
and landlords are still confident about the take-
up rates and C&W believes that once the supply
is fully absorbed, pricing might even start to
trend up as early as the beginning of 2018.
Singapore’s DC scene started with three ma-
jor operators: Equinix (SG1), Global Switch (Tai
Seng) and Singtel (Commtech) in the late 90s.
Being the first mover in this industry, they were
the gateway to global network providers via
international carriers. Equinix and Global Switch
dominated the MNCs, while Singtel attracted
most of the local enterprises and government
agencies. However, majority of the servers was
still housed within the office space until the late
2000s. Today, both Equinix and Global Switch
have the reputation as a “carrier hotel”, with up
to 200 telco carriers in each of their facilities.
At the time of the launch of iPhones came the
next wave of DC providers, namely, DRT (IBP),
Keppel (S25), Singtel (KC1), Equinix (SG2) and
1-Net (Chai Chee). Most of these providers have
248.5 MegaWatts APPROXIMATE IT POWER SUPPLY IN SINGAPORE’S DATA CENTRES
SENGKANG
9%NORTH$83M
32%WEST$310M
32%EAST$571M
SERANGOON
JURONG
4 | Cushman & Wakefield Data Centres: The New Frontier | 5
good occupancy given their strategic locations,
uptime availability and more importantly, their
good reputations in the market.
The more recent significant demand for DC
started in early 2010s when the Singapore gov-
ernment took a keen interest in developing the
sector further to cement Singapore’s position as
an infocomm technology and media hub un-
der the Smart Nation initiatives. As a result, the
Infocomm Development Authority of Singapore
(IDA), Singapore Economic Development Board
(EDB) and Jurong Town Corporation (JTC)
teamed up to establish a Data Centre Park (DCP)
in Jurong to attract multinational corporations
to set up premium DC operations in Singapore.
Till date, Telin has taken possession of a plot of
green field in the DCP, which is slated to com-
mence operation in December 2016.
Since 2011, Singtel (KC2), Tata, NTT, Keppel
(T25), Pacnet (110 PL), iO (AMK), and Century
Link have garnered more market share. Most
recently, with the completion of Keppel (T27)
and Equinix (SG3), the nationwide supply was
boosted to more than 248MW.
Demand for DC facilities has been robust and is
likely to sustain in the medium term. According
to C&W’s data, the compounded annual growth
rate (CAGR) of annual absorption by square
footage is 28% for the year 2008 through 2015.
In addition, based on Structure Research, Sin-
gapore colocation market size is likely to grow
from US$963.2 million in 2014 to US$1.265 billion
in 2016, clocking a 15% annual growth rate.
OPERATOR ADDRESS REGIONULTIMATE IT LOAD
CAPACITY (MW)
COMPLETION DATE
Singtel Yung Ho road West 36 Q4 2016
Telin Sunview Road West 12 Q4 2016
ST Telemedia /
StarhubAyer Rajar West 14 Q1 2016
ST Telemedia Defu Ave 1 East 12 Q2 2016
DRT Loyang Loyang Way (Brownfield) East 13.2 Q1 2016
Keppel T20 Tampines St 92 East 17 Q4 2016
1-Net Riverside Road North 12 Q1 2016
ST Electronics Ang Mo Kio North TBC TBC
Global Switch Gambas North TBC TBC
TOTAL
(9 DC facilities) 115.9
Source: Cushman & Wakefield Research
Pipeline Supply of DC Facilities
02008 2009 2010 2011 2012 2013 2014 2015
sq ft250,000
200,000
150,000
100,000
50,000
Data Centre Demand on the Rise Utilisation Trend
Source: Cushman & Wakefield Research Source: Structure Research
77.9%
60.0%
UTILISATION (POWER)
UTILISATION (RACKS)
81.5%
67.1%
85.5%
74.7%
6 | Cushman & Wakefield Data Centres: The New Frontier | 7
Artist impression of 1-Net North Data Centre (Provided by 1-Net Singapore Pte Ltd)
Average DC occupancy islandwide currently
stands at about 70%. With a large volume of
new supply coming online next year, occupancy
could fall further, but it should not be a cause for
alarm. Prices could bottom out quickly next year
due to the sustained demand from the growing
tech/network content companies (such as Face-
book, Netflix, Uber), major banks and insurance
companies outsourcing the data centres to be
compliant with MAS’ requirement on threat and
vulnerability risk assessment (TVRA). We expect
occupancy to be back in the 70% mark by 2018,
and it will soon turn into a landlord’s market with
positive rental reversions once the supply is fully
taken up over the next two years.
Moving forward, a combination of push and pull
factors will continue to drive demand for data
centres in the city-state. Increased compliance
requirements on data security from the finance
industry, along with the exponential growth in
data storage and management in a digital econ-
omy, should underpin the medium term growth
for the market segment. As the Singapore DC
market matures, it is highly unlikely to see an-
other opportunity like this following this wave
of new supply. It will therefore be wise to lock in
attractive pricing in the short term to prepare for
the business in the next decade.
Increased compliance requirements on data security
from the finance industry, along with the exponential growth in data storage and management in a digital
econ omy, should underpin the medium term growth for the market segment.
8 | Cushman & Wakefield Data Centres: The New Frontier | 9