Report | Intelligent Investment
Asia Pacific Data Centre Trends H2 2022
April 20, 2023
Key highlights include:
- New supply in Asia Pacific Tier 1 data centre markets (Greater Tokyo, Sydney, Singapore and Hong Kong SAR) fell from 2021’s record-breaking 399MW to 263MW in 2022. The lull in new stock was due to pandemic-induced supply chain disruption.
- Regional data centre vacancy fell to 12.4% on the back of solid demand, while leasing demand remained robust and continued to be driven by upgrading demand and ongoing expansion by hyperscalers.
- Greater Tokyo and Sydney continued to lead growth in planned capacity. The pipeline in Hong Kong SAR continued to be driven by redevelopment or renovation of older industrial buildings.
- CBRE expects 765MW of new data centre stock – representing around one-third of total planned capacity – to be delivered by 2025. Data centre operators will remain cautious amid strengthening economic headwinds, while delivery schedules will continue to be impacted by power constraints.
- Investment demand weakened in 2022 owing to the rapid increase in financing costs and growing fears of a recession. Asia Pacific direct data centre investment turnover fell to US$1.4 billion, the lowest annual total since 2019. Despite weaker overall demand, investor interest in emerging markets strengthened in 2022.
- CBRE has observed signs of improvement in the investment market in recent months, with nearly US$1.7 billion of new data centre funds raised in Q1 2023. Investment demand will be increasingly focused on greenfield development of prime assets, such as data centres with higher floor loading and/or sustainability certification.