Asia Pacific Data Centre Update

APAC PRIMARY MARKET - RANK #5

KEY INDICATORS*

865MW IN OPERATION

25 OPERATORS, 93 DATA CENTRES

1,105MW UC / PLANNED

12% VACANCY RATE

* Definition: Key indicators are based on operational Hyperscale Cloud, Colo, Edge & Telco data centre facilities in the market and excludes Captive & ICT.

Colo Hyperscale Cloud Telco

MARKET OVERVIEW

Growth in the Tokyo market has continued through the end of the 2022, with several major names in the data centre space making substantial announcements. Following entrances from major investment heavyweights like ESR and Gaw Capital earlier in the year, AirTrunk and Google reached major milestones for projects in the second half of the year. Hyperscaler market share has also been increasing with self-builds, particularly by the global top three, AWS, followed by Microsoft and Google. Currently, the total capacity under construction is estimated to be 221MW, with continued competition for sites in both Inzai and in Tokyo itself. Developments are driven more by power availability than preference for location due to power shortages in central Tokyo, albeit less so around surrounding clusters. With land availability becoming tighter and due to the government’s attempts to push data centres away from more saturated hubs, entrants into the market are seeking more creative means of evaluating sites in outlying submarkets around Tokyo (such as Saitama) as well as secondary Japanese markets such as Osaka. Tokyo remains underserved in terms of data centre stock per capita relative to other global peer cities, equivalent to less than 5% of that in Singapore. This supports robust demand ahead from major cloud service operators, driven by the market’s increasing cloud adoption, level of economic and technological development, and the government’s roadmap to build a Digital Garden City Nation , which aims to achieve a rural-urban digital integration and transformation. As options increase for the growing tenant demand in the market, the coming years should have impressive performance for the rest of this year and continuing into 2023, both for investors and operators.

ECOSYSTEM DEVELOPMENTS • AirTrunk has begun construction of its 110+MW hyperscale facility in West Tokyo after securing a green loan in Japan under its Green Financing Framework to fund the development. It will be the operator’s second data centre in the city after TOK1 opened late last year in Inzai with an initial capacity of 60MW that is scalable to 300MW across seven buildings. • BBIX , an internet exchange provider, has partnered with NEC and add points of presence at NEC’s Inzai and Kanagawa data centres as part of its Open Connectivity eXchange platform (OCX). BBIX is a subsidiary of SoftBank. • Equinix , announced its 15th International Business ExchangeTM (IBX) data centre in Tokyo, TY15, with an initial investment of $115 million. It will be strategically located adjacent to the existing network and cloud dense IBX campus in Tokyo and due to open in H1 2024. • Google , will open its first data centre in Japan in Inzai by 2023. Google already has cloud regions in Tokyo and Osaka, but these are hosted in colocation facilities run by partners like Equinix. • NEC has made public plans to develop further phases of its Kanagawa and Kobe data centres. The planned phase 2 for the firm’s Kanagawa data centre in Tokyo is scheduled for 2H23. Both phases will be powered by 100% renewable energy. • NTT held a successful tried of a torso-on-wheels robot in its Shinagawa Data Centre. NTT plans to expand the rollout of such robots to 15 further facilities throughout Japan. • Starlink went live in Japan in October 2022, the first East Asian country to receive live service. Starlink has entered into a partnership with KDDI to deliver high-speed, low latency broadband internet to 1,200 remote mobile towers.