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S'pore still No. 1 for Asia-Pac data centre operations

This article is more than 12 months old

Singapore still leads the race for data centre operations in Asia-Pacific despite a large amount of data centre space having come through in the last two years, according to a report.

A new study by real estate services company Cushman & Wakefield has ranked the Republic as the most robust market out of 10 Asian countries in terms of business operations for data centres.

It racked up the top score of 84.5 out of 100 in an index that identifies the biggest risks for such operations - ahead of South Korea, which had a score of 83.23; Hong Kong at 78.73; and Japan with 76.48 points.

The index, which looks at factors such as energy, Internet bandwidth, the ease of doing business, political stability as well as natural disaster and energy stability, showed that Singapore performs strongly in network infrastructure and its diverse connectivity to major Asia-Pacific markets.

Its pro-business environment and political stability are also plus points.

Cushman & Wakefield noted that Singapore holds the biggest capacity in the data centre market regionally, with a total of 370 megawatt (MW) of IT power supply among co-location operators.

The country has seen an influx of new data centre capacity in the last two years, which led to "some price and vacancy pressure".

But it should be able to expand its capacity by another 100MW over the medium to long term, on the back of the Smart Nation initiative as the Government pushes for a national digital transformation programme, said the report.

At the same time, investors are increasingly looking at data centres as an asset class. The report noted that data centres typically have higher capitalisation rates than traditional asset classes such as office, retail, hospitality and residential.