Hyperscale Investment In Singapore Is Only Natural

Hyperscale invesment in Singapore? There are harder decisions to make. Image Credit: Starhub Singapore

Singapore is a lightweight in a ring of heavies. Dwarfed in population and size by neighbouring countries, the island state punches above and beyond its regional weight class in multiple aspects. The city state’s political stability and clever pragmatism has led to continued growth over the years, with investment from global corporations growing from strength to strength since the nation took off as a valuable location for businesses in the 1970s. Sometime around 2020, Singapore earned the moniker ‘Silicon Valley of Asia’, owing to the dense concentration of tech companies within a country half the size of London. Such is the allure of Singapore that even during the pandemic, the nation’s Economic Development Board (EDB) reported a figure of $17 billion Singapore dollars in foreign investment, with around 80 per cent of the world’s top 100 tech firms having a sizeable presence in the country. 

Amongst the growing jungle of investments on Singaporean soil, the data center industry has long taken root as one of the fundamental sectors of the country’s tech ecosystem. The city state has led the APAC region as the premier data center hub for over a decade now, and its status does not look to wane any time in the near future. According to the Singapore DCI Report 2022 by Structure Research, the data center market was worth $1.6 billion U.S. dollars in 2021, and is expected to grow at a five-year rate of 16% in the coming years. Hyperscale investment and projects undoubtedly account for a large portion of the market, with Google’s recent launching of its third hyperscale data center in the country one of many examples.

Twin Agendas

This begs the question, aside from clear factors such as wealth and stability, what are the reasons behind hyperscale investment in Singapore? In a sense, the data center industry on the island has entered a new era, with the post-lifting of moratorium laws leading to a slightly different environment for potential investors. Singapore’s governing body now vets potential projects in accordance with specific limitations, to ensure sustainable growth of the industry- both literally and figuratively. At the present, two national agendas are key elements to hyperscale investors; the Smart Nation Initiative and the Singapore Green Plan 2030. 

A Natural Fit

The former aims to completely digitise the nation, from finance, healthcare, transport to urban development. It is a herculean project, with the most intricate of details accounted for; even the seasonal pest that is the dengue mosquito has been caught up in this mammoth undertaking, with the plan of drones being deployed to monitor breeding grounds one of the many projects under the initiative’s urban living category.  This thorough transformation flings open opportunities for tech conglomerates through cultivating a tech-oriented culture, and the support needed is immense. Hyperscale operations possess the flexibility to scale horizontally and vertically, allowing room for growth and adjustment when needed. In the context of an adaptable country like Singapore- who is constantly kept on its toes, hyperscaling is the optimum match.

The latter initiative, the Singapore Green Plan 2030, is much-like the country’s digitisation efforts in its multi-tiered approach. Singapore’s ambition is to galvanise the nation to green action, green culture, and needless to say, green infrastructure. Targets for 2030 call for 80 per cent of the nation’s buildings to be green by Gross Floor Area, and 80 per cent of new buildings to be Super Low Energy buildings. Although the initial thought of associating green efforts with hyperscaling might be one of challenge, in actuality, Singapore has the top-tier infrastructure, continued potential, and green ambition for investors to work with; investing in first-class green hyperscale data centers in the city state will be an admirable showing of credibility and a willingness to lead change under the bigger picture of global warming. 

Crisp Collars

Singapore’s comprehensive stability, unique blend of East and West, infrastructure and economic culture of welcoming foreign businesses will always place the nation high up in the priority list amongst global investors. Hyperscale investment in the country is simply a logical and instinctive step; such is the intertwining of the data center industry and the lion city that either entity seem to meet organically in innovation and policy respectively. Data center investors rarely need to loosen their ties in stress when it comes to Singapore.

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