APAC Data Centre H2 2023 Update

H2 2023 UPDATE

ASIA PACIFIC This index is a statistical comparison that evaluates markets on more than 20 parameters, including IT MW capacities of each market’s operational, under construction, planned and land banked stages of development, the summation of which is visually indicated by the size of each market’s circle on the graph. The index also factors vacancy rates, number and average size of data centres based on their status, number of operators that have operational data centres in each market, and the new operators that are in process to enter the market. These data points are stacked into a parameter matrix and weighted to derive their overall growth score - the higher the growth score, the more evolved the market we forecast it will become. The commonly used references to describe data centre markets as primary and secondary have been broken down further into the below four categories: POWERHOUSE markets are the largest in region in terms of their overall data centre capacity and extensive development pipelines. Since our latest H1 2023 update, Mumbai overtook Beijing as the largest powerhouse market in Asia Pacific. Although its current live capacity is not as high as Beijing, Tokyo, Shanghai and Sydney, markets that have also retained their powerhouse status in H2 2023, a substantial development pipeline of almost 1.5GW and reports of extensive land banked sites in Mumbai show the potential for this fast-growing market to become a 3GW+ data centre epicentre in the coming years whilst the other four are looking to become >2GW-sized markets upon the full development of their existing pipeline. The live capacity of the five powerhouse markets account for 50% of the operational data centre capacity in Asia Pacific and about 40% of the under construction and planned capacities combined. ESTABLISHED markets, Singapore, Seoul, Kuala Lumpur, Johor, Jakarta, Hong Kong, Melbourne, Chennai and Hyderabad, are prominent markets that show potential to become close to or exceed 1GW-sized markets for

Our Asia Pacific Data Centre Maturity Index tracks 30 data centre markets across Asia Pacific* to compare their current maturity status as well as their potential evolution over the next decade.

their strategic geographic locations and connectivity. All nine markets in the established category account for about 25% of the total operational capacity in the region. Since our last update, Kuala Lumpur has jumped from the developing to established category as operators explore or continue to evaluate the market as part of their regional expansion strategies. Surprisingly, when taking into consideration the development and land banked pipeline in Kuala Lumpur, we foresee in the coming years that it has the potential to overtake Johor, which has recently been in the spotlight as a notable data centre market in Asia Pacific. With the exception of Singapore, whose growth has been hindered by the recent moratorium and limited supply, all established markets are growing rapidly. DEVELOPING markets, Delhi, Osaka, Guangzhou, Bangkok and Manila, typically have smaller live capacities and therefore account for less than 10% of the operational capacity in Asia Pacific. About 90% of the operational data centres in this category are smaller than 10MW capacity. However, local demand is growing in these markets and operators are planning ahead to meet future requirements. As a result, these markets typically have higher vacancies because the absorption rates are slower than the new supply that is being added. EMERGING markets cumulatively account for under 5% of the total operational capacity across the 11 markets we track in this category. Since our last update, we have included Batam, which has gained the attention of operators as a “spillover” market reaping the benefits of its proximity to Singapore. We also note that development and planning activity is growing faster than previously forecast in Taipei and anticipate that both Taipei and Batam will progress into the developing category in the coming years. The development pipeline in emerging markets is restrained owing to the conservative approach by operators in entering these markets until more evidence of demand can justify considerations for entry.

*For all analysis, Asia Pacific region includes Australia, Mainland China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam only.

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