Investment management firm Colliers has released a report on Singapore’s data centre market prospects, covering anticipated future trends for the industry following the lifting of the data centre moratorium.
Colliers expects that Singapore will continue to draw in strong demand for data centre services from hyperscalers, digital content providers, and global financial players; however, the report also highlighted several challenges which data centre operators would need to manage and overcome in the near future.
Recovering from the Moratorium
Singapore is the second largest data centre hub in the Asia Pacific after Tokyo: as of 2021, there were more than 70 operational data centres in Singapore, with a total available power of 1000 MW. In 2022, the top three data centre operators (in terms of volume) were Digital Realty (16.6%), ST Telemedia Global Data Centres (14.5%), and Singtel (12.2%), while hyperscalers accounted for 31.3% of Singapore’s total data centre power load. Singapore’s data centre investment turnover reached 397.82 million SGD in 2021, which was 1.85 times the total volume from 2020.
However, the moratorium on new supply of data centres has placed significant strain on existing facilities, resulting in higher utilisation rates and bringing many facilities close to full capacity, across 2020 to 2022. In addition, the moratorium also led to construction delays which exacerbated supply constraints.
Hence, following the lifting of the data centre moratorium, data centre operators in Singapore face the challenge in striking a balance between strong demand for data centre services, saturated supply of data storage space, and working with the new, stricter guidelines and criteria set for future data centre projects.
Key Findings on Data Centre Market Prospects
According to Colliers, multiple factors contribute to booming demand for data centres. Hyperscalers and network and IT service providers require more cloud infrastructure due to increased adoption of technologies such as cloud computing, Internet of Things, and 5G among Singapore’s young, tech-savvy population. In addition, the rapid growth of crypto trading, Web3 activities, eSports, and the Metaverse, are emerging sources of data centre demand.
On the other hand, while Colliers expects supply of data centres to increase with the end of the moratorium, the report also highlights significant constraints which the government has set on data centre operators. These regulations are in-line with Singapore’s goals to halve carbon emissions by 2050, yet at the same time raise standards and operational requirements for data centre industry players.
For instance, the government of Singapore will be accepting new applications for data centre developments during a pilot phase beginning in Q2/Q3 of 2022, but will only accept a maximum of three operators with a cap on total power capacity at 60 MW per year. In addition, new data centres must operate with a Power Usage Effectiveness (PUE) metric of 1.3 or less.
“Moratorium and its effects on infrastructure and expansion of the DC market in Singapore and beyond” is a panel discussion which will be held at the upcoming Singapore Cloud & Datacenter Convention held at Marina Bay Sands, on July 21 2022. Speakers Eugene Seo (Managing Director, CapitaLand), Royce Wee (Public Policy Practitioner, Alibaba Group), and Wong Ka Vin (CEO, Data Center First), will lead an in-depth discussion on the moratorium’s implications for Singapore’s data centre industry. Register for the convention now!
Read on about W.Media’s insights on the moratorium here.