APAC Data Centre Update: H2 2024

GREATER SEOUL ASIA PACIFIC PRIMARY MARKET

INCHEON/ W.GYEONGGI

SW SEOUL

KEY INDICATORS*

GANGAM

520MW In Operation

23 / 49 Operators / Data Centres

SEONGNAM

217MW / 421MW UC / Planned

6% Colo Vacancy

Colo Hyperscale Cloud Telco

STH GYEONGGI

MARKET OVERVIEW Despite challenges related to land and power constraints, Seoul expanded its operational capacity by 15% over the past year, reaching 520MW. This milestone makes Seoul the eighth city in the Asia Pacific region to surpass 500MW in operational capacity. With a development pipeline of 638MW, the city is on track to exceed 1GW in the coming years. While capacity grew significantly, vacancy rates dropped by three percentage points to 6% by the end of 2024, driven by strong colocation demand from financial services, cloud, and IT companies. The Southwest Seoul cluster remains the largest, accounting for 26% of total operational capacity. However, new supply is shifting toward the Incheon/West Gyeonggi cluster, which comprises 46% of the development pipeline. Power companies in South Korea are actively exploring alternative energy sources for data centres. Korea Southeast Power and Samsung C&T have announced plans to use hydrogen fuel cells, while LS Electric and the Korea Hydro & Nuclear Power Corporation (KHNP) signed an MoU to develop small modular reactor (SMR) technology to power their AI data centres. KHNP’s i-SMR, capable of generating 170MW, is expected to be operational by 2028. In September 2024, the Korean government established the Presidential Committee on AI (PCAI) to shape national AI policies and strategies. The PCAI aims to position Korea among the world’s top three AI leaders, enhance AI safety and security, and attract private sector investments worth US$48.9B. Additionally, it targets AI adoption rates of 70% across industries and 95% in the public sector by 2030. Meanwhile, South Korea’s Personal Information Protection Commission (PIPC) issued guidelines on the applicability of the Personal Information Protection Act (PIPA) to foreign businesses, requiring both domestic and international companies to adhere to strict data protection standards. These policies and initiatives are expected to further drive demand for data centres in Korea.

ECOSYSTEM DEVELOPMENTS • CPP Investments and Pacific Asset Management Company (Pacific AMC) have formed a US$711M joint venture to invest in development of hyperscale data centres in South Korea with the first facility to be in Seoul. • Korea Southeast Power and Samsung C&T signed a Memorandum of Understanding (MoU) with the Chungnam regional government to develop South Korea's first hydrogen fuel cell power plant which will utilize a 900MW hydrogen plant in conjunction with 300MW of battery energy storage to support a hyperscale data centre located in Dangjin-si, south of Seoul. The project is estimated to cost US$1.7B with just over half allocated for the data centre. • KT Corp and Microsoft have agreed a multibillion-dollar five year AI partnership. As part of the deal, KT will provide US$450M worth of network and data centre infrastructure to Microsoft over a period of 15 years and invest in AI, cloud technologies, and IT business whereas Microsoft will provide resource commitments in terms of people and infrastructure. The partnership aims to drive KT's AI and ICT transformation and advance AI services across South Korea. • SK Telecom announced its plan to build gigawatt-scale "AI Infrastructure Superhighway“ in "key regions" across South Korea with the first one being in Pango, Seoul. In addition, the company also launched its GPU as a Service (GPUaaS) offering in South Korea with GPU's hosted at the AI Data Centre in Gasan, Seoul. The offering is in partnership with Lambda and will be called SKT GPUaaS. • The Yonsei University has developed the country’s first quantum computing hub at its Songdo International Campus. The hub consists of an IBM Quantum System One, powered by a 127-qubit IBM Quantum ‘Eagle’ processor. The hub will be used to support quantum research for biotech applications, including drug development.

CUSHMAN & WAKEFIELD | ASIA PACIFIC DATA CENTRE MARKET OVERVIEW