The cities leading the data center growth in APAC

The APAC region has seen significant data center growth as of late, with an increase of 488 MW of new capacity in the first quarter of 2022, up from 185 MW in the previous quarter. Total capacity now stands at over 8,700 MW and has been largely driven by Tokyo, Sydney and Seoul.

These were the findings of Knight Frank, which highlighted that in the whole of last year, the APAC region saw a growth of 24%, lifting the total to 1.500GW for the year. However, this year, between January to March alone, there was an increase of 488MW, up 185 from the final quarter of the year before, with Sydney becoming a gigawatt market for the first time.

In Tokyo, the greatest growth in supply came in the first quarter of 2022 from AirTrunk, Colt, and Stack Infrastructure. Meanwhile, in Sydney, in the first quarter, there were a number of facilities that saw ground-breaking. This included Microsoft's self-build and Macquarie's IC3 Super West, as well as AirTrunk's deployment of 30MW of capacity at SYD2. In Seoul, Alibaba launched its first Availability Zone, and there were also a number of announcements of facilities being jointly developed by international operators and asset management companies entering the market.

In the report, it was outlined that although Covid-19 infections "hampered data center development in Greater China markets," the pandemic has led to a boom in data center demand in the area, as "appetites" for the cloud increased due to the "shift to hybrid work" and increase in "overall internet penetration."

Further to this, Knight Frank's global data center co-head Ben Stirk outlined: "The fundamentals support this trajectory, with Asia being the most populous continent and a region where digital transformation is accelerating at pace. There is tremendous hyperscale growth potential underpinned by domestic demand. This, combined with the continued reopening of economies and the loosening of restrictive regulation means further above-trend growth can be expected moving forward."

It was also highlighted by the report that growth in both Singapore and Hong Kong had been impeded by a number of factors. In Singapore, for example, the 2019 moratorium on data centers meant growth had slowed, while in Hong Kong, Covid restrictions had led to "the withdrawal of people and businesses from the market."

Looking ahead, according to the APAC Hyperscale Data Center Market - Industry Outlook & Forecast 2022-2027, the hyperscale market is projected to grow at a CARG of 7% over the next three years.