Hanoi (VNA) – Southeast Asia will be the fastest growing region forco-location data centres over the next five years, with its market sizeexpanding by a compounded annual growth rate (CAGR) of 13 percent during2019-2024, according to a report released on August 19 by Cushman &Wakefield, a leading global real estate services firm.

This trend is underpinned by the rapid pace of digitalisation and surge indemand for cloud-based services across the region, which prompted bigcorporates such as Google, Alibaba Group, Amazon Web Services (AWS) to expandtheir cloud infrastructure footprint to facilitate the expansion.

The second fastest growing region is Asia Pacific, whose CAGR is expected ataround 12 percent over the same period, higher than that of the Middle East(11.1 percent), Africa (11.1 percent) and North America (6.4 percent).

Currently, North America is the largest co-location data centre by market size,at 17.2 billion USD. However, Asia-Pacific is expected to take over the topposition by as early as 2021. The total market size for Asia-Pacificco-location data centres is forecast to be around 28 billion USD by 2024, 20percent higher than the 23.4 billion USD market size projected for NorthAmerica.

Based on the latest edition of Cushman & Wakefield’s Data CentreCompetitive Index 2019 (formerly known as the Data Centre Risk Index),Singapore is ranked the third most robust data centre market globally. It isthe only mature data centre market in Southeast Asia, and has retained the topspot in Asia Pacific since 2017.

Within Asia-Pacific, Malaysia ranks fourth, with other ASEAN peers at seventh(Thailand), ninth (Vietnam) and 11th (Indonesia).

Cushman & Wakefield director for leasing Lynus Pook said that theeconomically active population in the Southeast Asian markets of Indonesia andVietnam will spur increased IT consumption and explosive growth in e-commerceand digital banking. Demand for data storage across Southeast Asia holdstremendous potential for data centre players.

However, he said infrastructure in these markets is not fully developed, posingsome challenges for data centre providers.

Until infrastructure levels in Thailand, Indonesia and Vietnam arewell-developed enough to support the smooth operation of data centres, playerswill continue to tap both Singapore and these emerging markets, according toCushman & Wakefield head of research for Southeast Asia Christine Li.

Christine Li said they will favour Singapore for its relative security to storemission critical data, and store the business-as-usual non-mission criticaldata in the neighbouring countries.-VNA