Data Centres: The New Frontier - Cushman & Wakefield
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Data Centres: The New Frontier
“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.
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 248.5
MegaWatts
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 APPROXIMATE IT POWER SUPPLY
to 200 telco carriers in each of their facilities. IN SINGAPORE’S DATA CENTRES
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
Data Centres: The New Frontier Data Centre Colocations Capacity: Regional Distribution
Despite the across-the-board pessimism in the Based on C&W’s data, there is approximate-
real estate industry, data centres (DCs) seem to ly 248.5 MegaWatts (MW) of IT power supply 9%
NORTH
be one unique segment that is booming with collectively in Singapore’s data centres. Out of $83M
lots of optimism. Singapore currently has the which, 163 MW has been utilised, 55.1 MW has
largest data centre market in the Asia Pacific been earmarked for future expansion and 30.4
region (even larger than UK, which is the biggest MW is currently available. In addition, there will SENGKANG
market in Europe), owing to several attributes be 115.9 MW of supply across seven DC new
which make it a conducive host country for data facilities by December 2016 islandwide (with 32%
WEST
centres. These include advantageous geographic additional two DC facilities being planned with $310M JURONG
location, safe and dynamic business environ- no specific timeline). This represents a whopping SERANGOON
ment, stable power supply, and support from the 46.6% of the total current stock by MW, which
government. Singapore is also spared from nat- presents an ideal scenario for tenants seeking Colocation Revenue
ural disasters such as earthquakes and typhoons better quality DCs or migrating from ageing 32% 2014 TOTAL
$963M
which affect many neighbouring countries. facilities due to competitive pricing. Despite this EAST
$571M
new wave of supply of DC facilities, operators
(in USD)
Source: Structure Research
4 | Cushman & Wakefield Data Centres: The New Frontier | 5
good occupancy given their strategic locations, mence operation in December 2016.
uptime availability and more importantly, their
Since 2011, Singtel (KC2), Tata, NTT, Keppel
good reputations in the market.
(T25), Pacnet (110 PL), iO (AMK), and Century
The more recent significant demand for DC Link have garnered more market share. Most
started in early 2010s when the Singapore gov- recently, with the completion of Keppel (T27)
ernment took a keen interest in developing the and Equinix (SG3), the nationwide supply was
sector further to cement Singapore’s position as boosted to more than 248MW.
an infocomm technology and media hub un-
Demand for DC facilities has been robust and is
der the Smart Nation initiatives. As a result, the
likely to sustain in the medium term. According
Infocomm Development Authority of Singapore
to C&W’s data, the compounded annual growth
(IDA), Singapore Economic Development Board
rate (CAGR) of annual absorption by square
(EDB) and Jurong Town Corporation (JTC)
footage is 28% for the year 2008 through 2015.
teamed up to establish a Data Centre Park (DCP)
In addition, based on Structure Research, Sin-
in Jurong to attract multinational corporations
gapore colocation market size is likely to grow
to set up premium DC operations in Singapore.
from US$963.2 million in 2014 to US$1.265 billion
Till date, Telin has taken possession of a plot of
in 2016, clocking a 15% annual growth rate.
green field in the DCP, which is slated to com-
Pipeline Supply of DC Facilities
U LT I M AT E
CO M P L E T I O N
O P E R ATO R ADDRESS REGION I T LOA D
DAT E
C A PAC I T Y ( M W )
Artist impression of 1-Net North Data Centre (Provided by 1-Net Singapore Pte Ltd)
Singtel Yung Ho road West 36 Q4 2016
Telin Sunview Road West 12 Q4 2016
ST Telemedia /
Ayer Rajar West 14 Q1 2016 Data Centre Demand on the Rise Utilisation Trend
Starhub
ST Telemedia Defu Ave 1 East 12 Q2 2016 sq ft
250,000
DRT Loyang Loyang Way (Brownfield) East 13.2 Q1 2016 85.5%
81.5%
77.9%
200,000
Keppel T20 Tampines St 92 East 17 Q4 2016
1-Net Riverside Road North 12 Q1 2016 150,000
ST Electronics Ang Mo Kio North TBC TBC 100,000 74.7%
67.1%
Global Switch Gambas North TBC TBC 50,000 60.0%
TOTAL
115.9 0
(9 DC facilities) 2008 2009 2010 2011 2012 2013 2014 2015
UTILISATION UTILISATION
(POWER) (RACKS)
Source: Cushman & Wakefield Research Source: Cushman & Wakefield Research Source: Structure Research
6 | Cushman & Wakefield Data Centres: The New Frontier | 7
Increased compliance
requirements on data security
from the finance industry, along
with the exponential growth in data
storage and management in a digital
economy, should underpin the medium
term growth for the market segment.
Average DC occupancy islandwide currently Moving forward, a combination of push and pull
stands at about 70%. With a large volume of factors will continue to drive demand for data
new supply coming online next year, occupancy centres in the city-state. Increased compliance
could fall further, but it should not be a cause for requirements on data security from the finance
alarm. Prices could bottom out quickly next year industry, along with the exponential growth in
due to the sustained demand from the growing data storage and management in a digital econ-
tech/network content companies (such as Face- omy, should underpin the medium term growth
book, Netflix, Uber), major banks and insurance for the market segment. As the Singapore DC
companies outsourcing the data centres to be market matures, it is highly unlikely to see an-
compliant with MAS’ requirement on threat and other opportunity like this following this wave
vulnerability risk assessment (TVRA). We expect of new supply. It will therefore be wise to lock in
occupancy to be back in the 70% mark by 2018, attractive pricing in the short term to prepare for
and it will soon turn into a landlord’s market with the business in the next decade.
positive rental reversions once the supply is fully
taken up over the next two years.
8 | Cushman & Wakefield Data Centres: The New Frontier | 9
Lynus Pook Christine Li Data Centre Advisory Group Director, Research Broker +65 6232 0815 +65 6232 0845 christineli.mw@cushwake.com Lynus.pook@cushwake.com Copyright © 2016 Cushman & Wakefield. All rights reserved.
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