KUALA LUMPUR, 3 February 2021 – Asia Pacific’s data centre is poised to enter a new cycle of growth, led by the region’s larger emerging markets, according to a new study by JLL. Asia Pacific is home to three of the world’s four most populous countries (mainland China, India, and Indonesia), providing attractive locations and fuelling a new cycle of operators and investors’ opportunities.
Surging internet usage and smartphone adoption, coupled with social media, e-gaming, video streaming, and big data applications, are all fuelling requirements for extra data centre capacity across the region. According to JLL’s recently published The Rise of New Data Centre Growth Markets demand for data centres continues to grow exponentially in Asia Pacific, fueled by cloud computing and the consumer mobile internet. The market for hosting, storage, and computing cloud services is expected to be worth USD 163 billion in 2021, which is an almost 30% increase over 2017, says the report. Additionally, cloud traffic in Asia Pacific is set to grow by more than 150% over the same period.
“The sheer scale of growing data consumption makes data centre infrastructure a compelling global and regional opportunity for both investors and operators. There are clear opportunities across the Asia Pacific data centre sector, in both emerging and mature markets, as demographics and regulatory frameworks evolve,” says Bob Tan, Senior Director, Alternatives, Capital Markets, JLL.
According to JLL, investor, and operator activities in mainland China, India, and Indonesia have grown significantly in recent months. They will further expand as demand for data centre services surges in these high-growth markets. JLL believes that all three emerging markets are currently being underserved by existing supply and facing strong demand from local and international operators.
Mainland China has more existing and upcoming supply than any other market in Asia Pacific, with significant investments and commitments announced over the past 18 months. In June 2020, Blackstone announced an investment of USD 150 million in Chinese data centre provider, 21vianet. Additionally, GDS and GIC announced a partnership in 2019 to build and operate data centres in China, signalling the market’s longer-term potential.
Malaysia’s data centre market size is likely to reach revenues of over $800 million by 2025. VADS Berhad , AIM Data Centre and Bridge Data Centre are some of the prominent owner operators in the Malaysia data centre market. Over 80% of the population has access to the Internet, the data traffic in Malaysia Internet Exchange is around 35 Gbps per day, which is expected to grow at about 5-10% YOY between 2020 and 2025 according to Business Wire”, says YY Lau, Country Head of JLL Property Services (M) Sdn Bhd.
“Infrastructure projects such as the National Digital Infrastructure Plan (JENDELA) has been implemented by the government to further improve broadband coverage and usage throughout the country to facilitate the expected higher demand during the new normal and propel the emerging digital economy”, added Lau.
In India, the Adani Group has plans to invest around USD 10 billion in data parks and has inked a memorandum of understanding with the US-based Digital Realty in 201915. Colt DCS also broke ground for a new hyperscale facility in Mumbai in 2020, one of India’s most extensive hyperscale facilities. Equinix has announced its entry into India in 2020 through the acquisition of GPX India.
In Indonesia, the new INDIGO cable landing in Jakarta connecting Singapore to Sydney adds to Indonesia’s attractiveness as a data centre market. In November 2020, we saw Space DC open its first Indonesian data centre19. Separately, Keppel Group has partnered with the Salim group to develop its first data centre jointly. In contrast, the Princeton Digital Group has entered the market from its acquisition of majority stakes in XL Axiata’s data centre portfolio.
Despite the clear opportunities in the region’s emerging data centre markets, there is also a strong local component to the investment evaluation criteria, which needs to be considered. Data localisation laws and other regulations and factors such as proximity of markets served and access to power supply require a nuanced view of the sector.
Key occupier and investor themes beyond 2021
Power supply and microlocation: There are other considerations governing market entry, such as water and fibre networks’ availability and connectivity to cable landing stations. Micro-location factors for all markets include a need to be located away from the flight paths of airports and areas prone to natural disasters, where they need to be outside of 100-year flood plains or earthquake faults.
The evolving role of renewable energy: Carbon emissions are becoming an increasingly significant challenge as data centre capacity and energy consumption grow. A growing number of governments, including those in mainland China, Singapore, South Korea, and Japan, are already making ‘Net Zero’ pledges carbon neutral by the second half of the century. These commitments have clear implications for data centres, and operators are increasingly likely to look at renewable energy sources to meet their power supply needs.
Operating models and market dynamics: The colocation market has gradually evolved. The market share of retail businesses is likely to be limited going forward as enterprises have been consolidating their requirements. Simultaneously, the movement towards hybrid and cloud deployments has also contributed to a higher degree of interest in the wholesale business. Several established operators have embraced the trend and are actively pursuing opportunities in the hyperscale market. New platforms and investors tend to look at this segment since it is easier to understand and provides speed to market and scale.
Partnerships to entry: Many operators looking to expand to new and emerging markets choose to partner with local developers as international groups may require joint ventures for development and/or operation from a regulatory standpoint. Local developers also bring market-specific expertise to the table, such as access to land banks, the ability to navigate complicated approval processes, and sourcing adequate power supplies. A local partner will be experienced in building up the superstructure and carrying out the necessary civil works.
While the regional drivers are elevating established markets along with the entire sector, we’re now entering a new phase for emerging markets as they embrace the growth of data centres. At this point, the big focus now is on identifying the right data centre opportunities in the region’s emerging markets, as investors and operators are focused on the sector’s prospects,” says James Taylor, Head of Corporate Solutions Research, Asia Pacific, JLL.
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Following the re-implementation of the Movement Control Order (MCO) on 13 January 2021 and the announcement of the Perlindungan Ekonomi & Rakyat Malaysia (PERMAI) Assistance Package by the YAB Prime Minister on 18 January 2021, the Ministry of Human Resources will extend the scope of the COVID-19 Screening Program For Foreign Workers nationwide commencing 2 February 2021.
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Further clarification provided by the Malaysian Government to Chambers and Associations:
– The definition of foreign worker excludes expatriates and only covers those who are employed under a temporary foreign worker permit (PLKS – Pas Lawatan Kerja Sementara).
– The screening of foreign workers involves all sectors with no exceptions.
– It is a one-off mandatory screening. For those who have been tested, they do not need to be screened again.
– During the current MCO, screening can be conducted by all industries operating during this time.
– If there is a positive case found, the premises only need to close for the disinfection period. Most premises can continue to be used after disinfection. Enclosed premises with a strong disinfection smell will have to wait 24 hours. Once the disinfection process is completed, the District Health Office must be informed to re-open the premises.
– Positive cases discharged from the hospital / District Health Office Clinic / home can immediately go back to work.
– Close contacts who have completed a 10-day isolation period can go back to work without re-testing.
– For employee screening, those negative can continue working unless they are a close contact to a positive case.
Further to MEF Circular AG 48/2020 dated 29th November 2020 on the announcement by YB Datuk Seri M. Saravanan, Minister of Human Resources, on 28th November 2020 that it was compulsory for foreign workers in every sector working in Selangor, Kuala Lumpur, Labuan, Negeri Sembilan, Penang and Sabah to undergo COVID-19 RTK-Antigen swab test with effect from 1st January 2021, members are informed that YB Datuk Seri M. Saravanan has also announced on 30th January 2021 that the COVID-19 Screening for all foreign workers is mandatory.
In accordance with Article 21 of the AmChams of Asia Pacific (AAP) constitution, Chair Steven Chan appointed the following chambers to serve on the Nominating Committee for the 2021 AAP Chair election: AmCham India, AmCham Indonesia, AmCham Japan, AmCham Korea, AmCham Malaysia, AmCham Okinawa, and AmCham South China. The committee appointed Joseph Dowd from AmCham Okinawa to serve as Chair of the Nominating Committee.
Call for Nominations for AAP Chair
[ACTION] Based on the information below, please use to advise/screen qualified potential Candidates expressing interest within your Chamber:
All full AAP members may submit nominations for the 2021 AAP Chair. The Chair election will take place at the board meeting on Thursday, February 25 and announced during the upcoming Business Summit in Singapore in March.
Nominees must be a representative of an AAP member chamber, and must be willing and able to devote the necessary time to support AAP activities. He/she also must be willing to pay for their own expenses related to AAP activities and travel.
Basic duties/requirements for the AAP Chair include, but not limited to:
- Lead and represent AAP during the annual Washington Doorknock;
- Work with member Chambers and help promote US business throughout the region;
- Preside as Chair over scheduled/unscheduled meetings as required and outlined in the AAP Constitution;
- Conduct him/herself according to the AAP Constitution.
Please consider this opportunity and send any nominations to the Nominating Committee Chair, Joseph Dowd at [email protected] no later than Monday, February 8. The nominating committee will then review and consider the list before reporting to the full AAP board.
The AmChams of Asia Pacific is a strong network of professionals within an extremely diverse industry pool spanning our region. Selection of our Chair to help lead our group as we navigate priorities is critical to our collective success. The details outlined below bring clarity to the rules and process outlined in the AAP Constitution for the election process by highlighting standard acceptable practices. In addition, they are a key part of taking positive steps to ensure we have the best possible election and results.
The below outlined points are offered to help ensure the aforementioned is achieved to the greatest extent possible. The AmChams of Asia Pacific deserves nothing less:
- A Candidate for AAP Chair is disqualified from nominating another Candidate
- Maximum of (1) qualified Candidate may be nominated per member Chamber, nominated by that Chamber’s leadership
- Electioneering is strongly discouraged and must be limited to maintain absolute fairness for all Candidates. Such activities are absolutely prohibited on the day of the election. Intimidation, tampering and/or harassment shall not be allowed.
- Election times shall be fixed with defined start/stop (open/close) times. Member Chambers shall cast their vote during the fixed times only.
- Once a member Chamber casts their vote, their vote is final. Changes or modifications to that vote shall not be permitted.
- As a current Chairman is not part of the nomination or election process, he/she should remain neutral in all discussions. Additionally, he/she must refrain from recommending or endorsing a Candidate.
In light of the continued necessity for virtual meetings, elections and otherwise, the upcoming election will be similar to last year’s election.
Provisions will be made for all Candidates to present themselves prior to the vote by video conference (see note below). This is a last opportunity for Candidates to present themselves and their vision to the voting member Chambers. (The order of presentation will be alphabetically)
Below is an estimated timeline for the upcoming weeks. Every effort will be made to follow that dates as outlined, but there will always be inherent flexibility.
- Jan 21 – Nominating Committee Kick-off Meeting accomplished
- Jan 26 – Nominating Committee 2nd meeting accomplished
- Jan 28 – Election notifications/invitation for Candidates sent to AAP member Chambers by Secretariat
- Feb 8 – Deadline for Chair nominations/applications. Candidate bio/CV due to Nominating Committee for submission/distribution
- Feb 10 – Final slate of candidates and bio/CV distributed to AAP member Chambers
- Feb 25 – Board Election – FIXED (Candidates will be afforded up to a 3-minute presentation to member Chambers)
NOTE: An optional self-made video presentation may be used by candidates and made available to AAP member Chambers (5-minute max). This video will be voluntary.
