Research and Markets Predicts APAC Data Centre Colocation Market to Reach USD $30.69B by 2029

According to Research and Markets‘ new report, the APAC Data Centre Colocation Market was valued at USD $17.14 billion in 2023, and is expected to reach USD $30.69 billion by 2029, rising at a CAGR of 10.20%.

The deployment of 5G services and the growth in the demand for connectivity in new locations and Tier I and Tier II cities attract investments from edge data centre operators. For instance, edge operators, such as Leading-Edge Data Centres and Edge Centres, actively invest in establishing multiple edge data centres across Indonesia, Australia, Malaysia, the Philippines, Thailand, India, Vietnam, Thailand, and others.

Governments and data centre operators, according to the Research and Markets report, are becoming increasingly interested in renewable energy. Governments across all APAC countries are taking initiatives to promote the adoption of renewable energy sources. For instance, Taiwan aims to generate 20% of its electricity through renewable energy by 2025 using wind and solar PV promotion plans. Taiwan’s renewable power capacity will reach over 26 GW within the next five years.

Data centre operators also participate in governments’ efforts to adopt sustainable energy by using renewable energy, signing Power Purchase Agreements (PPAs), or setting targets for carbon-free operations. For instance, in March 2024, NTT DATA signed a new solar energy PPA of around 40 MW with TEPCO.

Research and Markets Highlights Key Trends

Increased Digitalisation

Digitalisation is a major agenda of governments in all countries, including Malaysia, Thailand, India, Australia, Japan, South Korea, China, New Zealand, and others.

Several governments plan digital strategies to strengthen the digital growth of their countries. For instance, the government of Australia launched its Digital Economy Strategy 2022 Update to develop Australia’s digital economy by 2030.

Rise in Mergers and Acquisitions and Joint Ventures

The significant growth potential and revenue-generating opportunities in the APAC data centre market prompt operators to continuously invest in mergers and acquisitions and engage in project joint ventures. Several global organisations enter the industry through joint ventures. For instance, STACK Infrastructure entered the South Korean industry through a joint venture with ESR Cayman to develop a data centre.

Segmentation Insights from Research and Markets Report

• The development of colocation data centres dominates the data centre construction market in APAC in terms of the number of investments. Several new entrants enter the market for the development of colocation data centres. Hyperscale data centre operators also increase their market presence with investments in cloud regions. In 2023, some countries, such as Indonesia, Australia, and Myanmar, also witnessed investments in enterprise data centers.
• The APAC data centre colocation market has strong growth potential in electrical infrastructure due to the high demand for lithium-ion and nickel-zinc batteries used in UPS systems. Operators can also adopt new-age generator sets that run on hydrotreated vegetable oil (HVO), natural gas, etc.
• The APAC data centre colocation market demands air- and water-based coolingsolutions in terms of cooling infrastructure. Data centre operators, especially in Southeast Asia, are more inclined toward adopting water-based cooling solutions due to the tropical climate. The market has opportunities for rack infrastructure vendors with the growth in the adoption of racks of 42U to 52U in height. Some countries in the region also adopt racks below 42U height.