New data centre supply in the four tier I Asia Pacific markets (Greater Tokyo, Sydney, Singapore and Hong Kong SAR) totalled 305MW in H2 2021. This marked the highest total for a six-month period since CBRE’s records began.
The record volume of new supply pushed up net absorption in the four Asia Pacific tier I markets to over 280MW in H2 2021. Hyperscale cloud providers remained the main demand driver, with many groups exhibiting requirements for bigger facility sizes and multiple-site deployments.
Asia Pacific direct data centre investment turnover totalled US$4.8 billion in 2021, an increase of over 100% from the previous year. Data centre operators completed several acquisitions; capital-raising remained strong; and more investors are setting up operational platforms.
Large populations of internet users, solid economic growth, government support for industry 4.0 and 5G development continue to drive interest in data centre development in emerging Southeast Asia, with Indonesia and Malaysia the largest markets at present.
Mainland China’s pursuit of zero-covid continues to result in sudden and intermittent disruption to manufacturing, logistics and supply chain operations.
CBRE expects this environment to drive the further strengthening of just-in-case strategies as occupiers look to build up inventory to mitigate potential disruption – a trend that will generate substantial new demand for industrial and logistics real estate on the mainland.
As industrial and logistics occupiers look to extend their footprint to emerging hubs, tier I and satellite cities of key metropolitan areas are likely to attract stronger demand.
Occupiers are advised to focus on securing space in modern logistics facilities in locations with good transportation links, while investors are recommended to consider constructing greenfield developments in emerging hubs.
The Q4 2021 Knight Frank Data Centre Report continues our growing coverage of the Asia Pacific region. Market analysis includes both established data centre hubs such as Singapore, Hong Kong, Mumbai, Sydney, Seoul, and Tokyo; and fast growth markets including Hanoi, Bangkok, Shanghai, and Kuala Lumpur – to provide the most wide-ranging view of the region.
The momentum of Q3 carried into the fourth quarter, with several major announcements across key markets in Asia Pacific. Total supply (live, phased, and under construction) in APAC increased almost 185MW in Q4, bringing total capacity in the region to over 7,900MW. Take-up was around 120MW, moderating slightly from Q3 but in line with previous quarters. For the whole of 2021, IT capacity across APAC grew by over 1,500MW.
The gigawatt markets of Tokyo and Shanghai added significant capacity in 2021, adding between 300MW to 400MW each, to their respective markets. In Q4, AirTrunk’s TOK1 facility opened in Tokyo, with its first phase up to 60MW. STT also announced its plan for two data centres in Inzai totalling 60MW. In addition, Stack Infrastructure’s has plans for a 36MW campus, and Colt has secured land for two sites in Inzai and Northern Tokyo for 45MW.
The Chinese authorities have announced the setting up of four mega clusters of data centres in the north and west of the country. This was followed by an announcement of a further 10 national data centre clusters as part of a broader strategy to transport data from eastern regions of China to western regions for storage and calculation. On the back of government plans to classify data centres as infrastructure assets for easier access to funding, India also saw several major new investments into data centre platforms, including Hiranani-Yotta and Kotak-Sify.
In Southeast Asia, Singapore lifted its hold on new data centre builds after a two-year moratorium. Under a new pilot program, up to 60MW of capacity will be made available in 2022, to developments of between 10 to 30MW each. As part of the consideration, applicants for new data centre facilities will need to commit to achieving a PUE of below 1.3 and obtain Singapore’s Green Mark for Data Centres-Platinum certification – in addition to adding strategic value for Singapore. We expect this pathfinder approach to serve as a model to other countries looking to find the right balance between their digitalization and sustainability goals.
Growing interest is also seen in emerging APAC markets like Seoul, Osaka, Ho Chi Minh, and Bangkok.
Hong Kong Market Direction 2022: What You Need to Know in the Year of the Tiger
The emergence of a fifth wave of COVID-19 in Hong Kong, together with continued strict border controls, has seen investors and corporations looking to adopt new strategies to manage the new normal in commercial real estate business operations.
In our Hong Kong Market Direction 2022 report, we highlight six factors we see impacting the future direction of the commercial real estate market in the Year of The Tiger:
ESG Is Too Important to Be Ignored
Bargain Hunting for Premium Office Properties
Developers to Enrich Landbanks in the Northern Metropolis
Automation and Warehouses are Connecting
Healthy Lifestyles to Forge New Demand for Fitness Centers
Growing Needs for Quality Virtual Conferencing and Collaborative Workspaces
What can Artificial Intelligence (AI) offer the built environment in our age of climate emergency? At the heart of Deep Reinforcement Learning is an agent and an environment. Just as we are starting to learn that our actions within our environment have consequences on an immense, planetary scale, innovative AI is learning too – and faster than us.
By using Deep Reinforcement Learning to optimise the energy efficiency of HVAC systems in the built environment, we can minimise the negative impact of our own actions without sacrificing occupant comfort. As businesses all over the world attempt to transition to Net Zero, this technology has a pivotal role to play.
But why is Deep Reinforcement Learning the best way to optimise HVAC performance?
Cushman & Wakefield’s Asia Pacific Office Fit-Out Cost Guide 2022
Cushman & Wakefield’s Office Fit-out Cost Guides provide an indication of the fit-out construction costs for occupiers across key cities around the world. Whether it’s a basic, collaborative, or advanced hybrid fit-out requirement, these Guides compiled by our Project & Development Services team serves to assist occupiers in defining their capital planning and relocation budgets.
The Guides include a comprehensive fit-out cost section covering furniture, professional fees, mechanical & electrical works, construction works, audio visual/IT and other miscellaneous costs, as well as reinstatement and retrofit costs.
Estimated costs provided in our Guides are indicative of market averages based on certain assumptions. Exact costs for specific projects may differ to those presented – we recommend engaging a Project & Development Services professional to advise on precise costings based on your unique construction requirements.
Asia Pacific Guide 2022 Highlights
One clear factor that has come out of the COVID-19 pandemic so far has been the resilience of the Asia Pacific region.
However, many uncertainties remain especially around what the office of the future will look like and how employees will occupy and use that space. With this we have seen a shift in how corporates are envisioning their space requirements, which in turn impacts fit-out decision-making, all within an environment where costs are still being closely scrutinized.
For 31 key cities across 14 markets in APAC, this year’s Guide External Link covers:
A comprehensive fit-out cost breakdown including furniture, professional fees, and construction works
Average costs to reinstate office spaces
Cost estimates of the different styles of fit-out to cater to the post-pandemic workforce
Average retrofitting costs for a budget-friendly alternative if you’re looking to update and refresh your office environment
