Data centre demand continues as land and power constraints drive push into new markets, report shows

Cushman & Wakefield has released its annual Global Data Centre Market Comparison report, with Japanese markets outranking other Asia Pacific counterparts in both the Established and Emerging market categories.

Tokyo ranked third globally behind Virginia and Atlanta in the Established markets category, with Mumbai placing seventh and Sydney ninth.

Osaka ranked fourth in the Emerging markets category, with Hyderabad in eighth place and Bangkok in tenth.

The 2024 report, now in its fifth year, has an updated methodology to better reflect the rapid changes in both headwinds and tailwinds shaping the data centre market.

High weight factors include power availability, land availability and market size; mid weight factors include development pipeline, land price, power cost and cloud availability/operator presence.

Thirty APAC markets were included in the report, including new entrants Auckland, Batam, Brisbane, Perth, Pune and Taipei.

While Singapore and Hong Kong remain in the Asia Pacific Top 10 Established markets, both have fallen out of the global ranking because of their constrained land supply, with neighbours in Malaysia (Johor) and Indonesia (Batam) consequently benefiting from their geographical proximity to Singapore.

Mumbai, Tokyo and Jakarta have jumped up the rankings as some of the most rapidly growing markets with each scoring well in absorption, development pipeline and vacancy.

Within the emerging markets category, Osaka, Chennai and Hyderabad benefited from high competition for sites in neighbouring hotspots Tokyo and Mumbai.

The report shows all three regions—the Americas; Europe, the Middle East and Africa; and Asia Pacific—are expected to see existing capacity more than double.

Asia Pacific currently has 10.6 GW operational capacity, with a development pipeline of an additional 13.3 GW expected to be realized in the coming five-to-seven years.

“Hyperscale activity has continued to add significant capacity to pipelines across markets like Mumbai, Tokyo, Sydney and Jakarta. As with other regions, we are also seeing growing interest in smaller markets. Emerging markets including Osaka, Hyderabad, Johor and Bangkok in particular are seeing growth,” said Vivek Dahiya, Cushman & Wakefield’s Managing Director and Head, Asia Pacific Data Centre Advisory Team.

“At a country level, Singapore is on track to join mainland China, Japan, Australia and India as markets with over 1GW in operational capacity in 2024.”

Alex Moffatt, Cushman & Wakefield’s Australia Head – Data Centre Advisory Team and Director – Capital Markets – Alternative Investments, said Sydney continues to be an APAC powerhouse market and in the top 10 global data centre markets, with 1GW of existing capacity and forecast capacity of 2GW.

“Over the past year, available electricity capacity has become the number one consideration for data centre operators as they conduct site selection. Countries such as Australia which have a pathway to significant additional electricity capacity from renewable sources such as wind, solar and hydroelectric have become prioritised,” Moffatt said.