KUALA LUMPUR (Feb 3): The market for hosting, storage, and computing cloud services is expected to be worth US$163 billion (RM660 billion) in 2021, which is an almost 30% increase over 2017, according to a new study by real estate consultancy firm JLL.

Additionally, cloud traffic in Asia Pacific is set to grow by more than 150% over the same period, JLL said in its recently released report titled “The Rise of New Data Centre Growth Markets”.

The 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 Asia Pacific. 

“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,” said the report.

“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,” said Bob Tan, senior director, Alternatives, Capital Markets, JLL. 

According to the firm, 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. 

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 US$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. 

JLL Property Services (M) Sdn Bhd Country Head Y Y Lau said Malaysia's data centre market size is likely to reach revenues of over RM800 million by 2025. 

VADS Bhd, 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% year-on-year between 2020 and 2025 according to Business Wire,” Lau added. 

Meanwhile, she noted that infrastructure projects such as the National Digital Infrastructure Plan (JENDELA) have 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.

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