October 2023 EMEA Data Centre Update

Colo Hyperscale Cloud Telco

EMEA ESTABLISHED MARKET OVERVIEW

MIDRAND

RANDBURG

KEY INDICATORS*

10 OPERATORS, 22 DATA CENTRES

133MW IN OPERATION

99MW UC / 99MW PLANNED

11% VACANCY RATE

EAST RAND

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

MARKET OVERVIEW

Johannesburg continues to be the leading choice for data centre demand in South Africa. Its attractiveness is attributed to its mature ICT infrastructure, connectivity, significant market size, and its role as the headquarter city for major hyperscale service providers, establishing it as a top pick for African data centre activities. In addition, Johannesburg's competitive advantage is further underscored by its status as the third-most cost-efficient location worldwide for land prices. Considering that Africa's population is projected to double by 2050, and the internet is a driving force behind economic advancement and digitalization, there is an increasing demand for the processing, transport and storage of data both within South Africa, but potentially as a hub for the region. Teraco has been long-established in Johannesburg as a carrier neutral hub for carrier services. The economic potential for ICT growth in general underscores the pressing necessity for data centres in the area to support and maintain this process of transformation and growth. A total of 11 major subsea network cables connect to Johannesburg, and its telecommunications infrastructure is the most developed in the country. South Africa’s data centre market is highly active and is expanding, including recent investments by global colocation providers Digital Realty and Equinix. Cloud Service Providers already present in South Africa include Amazon Web Services (AWS), Microsoft Azure, Huawei, and Oracle, with Google Cloud joining soon. The market is, however, facing a power crisis. The general rule in South Africa is that generating power on-site costs about seven to eight times more than buying utility power. With increased runtime hours on generators, this quickly becomes a substantial expense compared with utility energy bills. Some operators are adapting their facilities to accommodate temporary external generator set connections, which enables them to provision additional power capacity in four to five hours. Johannesburg is the only city to have access to gas turbines as an alternative to diesel generators.

ECOSYSTEM DEVELOPMENTS • Equinix plans to enter the South Africa data centre market with a 4MW facility focused on retail demand. Expected to open in mid-2024, Equinix will likely have larger expansion plans for the market as demand heats up. This follows Equinix’s acquisition of MainOne which enabled the operator’s entrance into Africa through Nigeria, Ghana and the Ivory Coast. • Vantage Data Centers are currently constructing a second campus in the market. The data centre provider expects an initial 20MW to be live in mid-2024. Simultaneously, Vantage has begun to expand its initial JBN1 campus in Midrand in response to growing demand. • Africa Data Centres has signed a 12MW PPA with DPA Southern Arica Pty Ltd to provide solar power for its data centres in South Africa. The agreement will have a 20-year term. • Teraco has begun construction on the second phase of its Johannesburg data centre. The first phase was completed in November 2022 with 19MW of power. Once complete, the campus will have a total of 50MW of IT capacity. • Teraco is also working on another expansion at its Isando campus. The campus is located 20km south of the Bredell data centre. The data centre provider has opened several data centres in South Africa over the last few years. • Open Access Data Centres (OADC) has secured 7MW of power for a new data centre in Isando. The 1,600 sqm of white space will be joined by two developments in Cape Town that will grow total capacity by another 8MW. • In October 2022, NTT launched its first data centre in the market, totaling 6MW and 3,000 sqm. The Japanese operator has plans to double the size and capacity of the facility. NTT has implemented a closed-loop cooling system in the facility to absolve concerns around water scarcity issues. The company had first begun to evaluate the market in 2020.