Through his company Frasers Property, billionaire Charoen Sirivadhanabhakdi has announced an investment of 7.3 billion baht ($231 million) in building a new data center in Bangkok, in partnership with ST Telemedia Global Data Centres (STT GDC).
They have recognized “robust demand” from enterprises and consumers, and 30,000sqm of colocation facilities will service many industries as well as supporting the rollout of 5G.
Supparat Sivapetchranat, CEO of STT GDC said “There is a projection that the demand for data centers in Thailand will grow more than 20% a year. This is very strong growth. Every application at the end of the day is on the data center”.
This reflects wider investment sentiment across Asia Pacific
Lots of unlocked social media and e-commerce potential across the region means that investors are on the move. APAC countries with growing populations and technological advancement formerly lagging Europe and North America are now seeing growing investment. Furthermore, with edge computing far more nascent than in other regions, cloud computing is still very much on the rise so it is no surprise to see the data center market expanding.
In India, Equinix announced an acquisition of two data centers for $161m in August, while AWS is reportedly planning to invest $1.5bn to set up two data centers as well. Meanwhile, Japan’s NTT has committed to investing over $2bn over the next 4 years in the country, with new campuses in Navi Mumbai, Chennai, and Noida, and improving current facilities in Bengaluru.
According to recent research, the Indonesian data center market is expected to grow at a CAGR of 11% between 2019 and 2025 and see over $1bn of year on year investments. Malaysia similarly is expected to see a CAGR of over 8% in the years to 2025 with the size of its data center market to exceed $800m.
The hyperscalers are also moving in recognition of the growing opportunity across APAC; Alibaba Cloud has added three hyperscale datacentres in China to bring its total in the country to 5.
There is also the recent news that a group of investors, led by the former President of Equinix’s APAC business and including former executives at Facebook and Tata Communications, have committed $1bn to data centers in APAC. This new group, Digital Edge, is one of the biggest signals yet of the belief of investors in the promising future of the data center market in APAC.
5G means that we can only expect this trend to continue
As APAC countries catch up and begin to fulfill their potential, we should expect to see this trend of large data center investments in the region continue. The advent of 5G is likely to be a key factor in this upward trend. As 5G licenses are sold across APAC countries we are likely to see more of a capital commitment towards providing greater mobile services in the region, and the growth of e-commerce and social media in APAC will only be accelerated by 5G. Increased data volumes as a result of 5G will necessitate greater data centers facilities in all countries, let alone countries seeing organic growth in data volumes already from population increases and technological advances such as those in APAC.
There can be little doubt that the latest moves in the data center market in APAC are part of a wider investment trend that is likely to continue. Covid-19 has created a world where digital services are ever important, and with 5G rolling out across the region there are plenty of reasons for investors to remain optimistic.
This content has been made available through our partnership with STL Partners, an independent research and consulting firm covering the telecoms industry. The author, Matt Bamforth, is a consultant with STL Partners.
APAC | data center | hyperscaler | market research | public cloud