Singapore down to world’s No. 3 data centre market, but tops APAC

Singapore remained among the top data centre markets globally in all three high-weight categories — market size, fibre connectivity and cloud availability — according to the latest annual Global Data Centre Market Comparison report from Cushman & Wakefield.

The report showed that Singapore’s strong performance across categories including its low vacancy rate – reflective of high demand – low environmental risk, and its status as a smart city helped cement its rank despite its recently-lifted two-year moratorium which limited new stock.

The annual report, now in its fourth year, ranks major data centre markets around the world according to 13 weighted categories including market size, fiber connectivity, power cost and environmental risk.

The report covered more than 1,600 data centres spread out in 63 markets across the world, of which 20 are in the Asia Pacific region. Singapore ranked third globally, dropping by a notch, and No. 1 in APAC.

Northern Virginia, the largest data centre market in the world and the top-ranked market for the past three years, this year shared the highest rank with Portland following surging prices for prime land and a county-wide pause on development due to power restrictions.

Singapore and Hong Kong (4th globally and 2nd in APAC) were the only metropolitan areas outside of the United States to make the top 10 overall rankings. 

Completing the world’s top 10 Atlanta, Chicago and San Francisco Bay Area (tied at No. 5); Dallas; Phoenix, and Seattle.

Hong Kong, ranked sixth in 2022, also ranked highly across categories, with strong connectivity, consistent demand, availability of cloud services and its business-friendly tax structure offsetting its high land prices.

Within APAC, Singapore and Hong Kong were ranked first and second, with Sydney and Seoul tying for third place. Completing the region’s top 10 are Tokyo, Beijing, Mumbai, Shanghai, Melbourne, and Kuala Lumpur.

New entrants Johor and Hyderabad ranked at 15th and 28th on the overall index, respectively. Johor was noted to benefit from its proximity to both Singapore and Kuala Lumpur and its developer-friendly tax environment, while incentives to the sector being offered in Hyderabad along with its early cloud availability it touted as an alternative top market to Mumbai.

Auckland, New Zealand, was listed as a market to watch for its connectivity potential.

Todd Olson, head of Cushman & Wakefield’s Asia Pacific Data Centre Practice Group, said 2022 saw hyperscale tenants continue their expansion across all regions.

“Hyperscalers, followed closely by co-location providers and developers, have shown increasing interest in secondary and emerging markets which often offer greater availability of, and lower prices for, both land and power,” said Olson. “Moving forward, we expect to see secondary markets make significant jumps in the rankings.”

Vivek Dahiya, head of Cushman & Wakefield’s Data Centre Advisory Team in APAC, said interest and investment in the region would continue at pace as the sector evolved.

“We are seeing significant investment and interest in Bangkok, Ho Chi Minh, Hyderabad, Johor and Manila and we expect this to continue, along with interest in other primary and secondary markets in the region, said Dahiya.