Global Data Centers
Data centers are still viewed as a niche real estate asset class, but transparency and liquidity are improving as the sector grows.
Like the U.S. and European markets, the data center sector in Asia Pacific has been benefiting from the growth of internet traffic and data volume as the numbers of and usage by both individual and corporate users rose. In line with global trends, the cloud services industry is currently leading the next wave of data center demand in the region. In addition, the COVID-19 pandemic has accelerated consumer trends such as e-commerce penetration and led to changes in infrastructure for home working and distance learning.
With those strong demand drivers in place, occupancy rates are high, ranging from 75 to 95%. A number of markets are expected to significantly increase supply, as capital continues to flow toward development (exhibit AP1). The top four markets of Singapore, Tokyo, Sydney and Hong Kong have attracted the most development interest, and capacity is expected to double by 2022. However, occupancy rates are likely to remain high because of robust demand from hyperscale cloud service providers.