Cushman & Wakefield Ranks Global Data Center Markets In New Study

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Hong Kong among top five global markets with lowest taxes, and continues to lead the Greater China data center market alongside Shanghai and Beijing

 

HONG KONG, CHINA – Media OutReach – 17 February 2020 – Data Centers, once a niche investment and inflexible asset for global
enterprises, are now a cornerstone of the information economy, and USD 100
billion has poured into the asset class over the past decade, according to
Cushman & Wakefield’s report — Data Center Market Comparison.

This significant
capital inflow has been matched by an equally major technical shift, as
enterprises have chosen to move workloads off premises, first to colocation
facilities and more recently to a mixture of colocation and public and private
clouds. This shift has caused the largest cloud platform providers — Amazon,
Google and Microsoft — to become the most influential players in many markets,
altering data center sizing by a factor of 10. The 10-megawatt (MW) data center
that was impressive 10 years ago now pales in comparison to 30-MW leases now
signed with increasing regularity. 

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Cushman &
Wakefield’s study evaluated 1,162 data centers across 38 global markets, with
each data center scored across 12 weighted criteria. In consideration of each
market, the highest weight was given to cloud availability, fiber connectivity
and market size; mid-weight considerations were development pipeline,
government incentives, market vacancy, political stability and sustainability;
and low-weight considerations included environmental risk, land prices, power
costs and taxes. 

 

For the top 10 markets
— Northern Virginia, Silicon Valley, Dallas, Chicago, New York/New Jersey,
Singapore, Amsterdam, Los Angeles, Seattle and London — global leaders maintain
supremacy. Still, emerging markets such as Atlanta, Denver, Dublin, Las Vegas,
Phoenix, Portland, Salt Lake City and Vancouver offer compelling alternatives.

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Hong Kong, Shanghai
and Beijing continue to lead the data center market in Greater China, and now
place among the global leaders for market capacity. Beijing placed in the top
five globally for market size (joining Northern Virginia, London, Tokyo and
Silicon Valley) after decades of brisk economic growth have led to a very large
market run by a mix of local operators and telecommunication companies. Hong
Kong — A main site for global business that has no value-added tax — is among
the top five global markets with the lowest taxes, alongside Portland in the
U.S. that has no sales tax, creating a compelling incentive by itself.

 

“The speed with
which the industry is shifting makes the creation of a data center strategy a
complex and daunting task,” said Dave
Fanning, Executive Managing Director and Leader or Cushman & Wakefield’s
Data Center Advisory Group
. “Enterprises must determine what to do
with their on-premises facility, which workloads to move to the cloud and how
implement a hybrid IT strategy. Developers and operators require a parcel with
robust fiber and access to power as well as a thorough grasp of the permitting
process and all risk factors. Investors must be able to assess the long-term
potential of a data center to hold its value and how easily it can be upgraded.
All involved require access to capital and a clear understanding of objectives.”

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Although the study’s
top three markets had considerably higher scores than fourth place, the next 12
markets were separated by a final score of less than 10%. This close placement
represents a new shift toward key secondary areas fast becoming primary markets
around the globe.

Read Also:  Students Kickstart their Career with Kaplan in Singapore

 

Several markets
throughout Europe — notably London, Paris, and Milan and Zurich — have received
continued interest from international operators, with the continent becoming a
new hyperscale target where power is available.

 

Large sites have sold
recently in emerging U.S. markets such as Portland, Phoenix and Atlanta, with
these areas potentially offering significant savings over locating in
California or Northern Virginia.

 

Additional markets in
Asia-Pacific — especially Sydney, Tokyo, Hong Kong, Beijing and Shanghai — also
are expecting considerable growth in the next two to three years, with demand
for greater connectivity and need for modernization of older assets required.
The top 15 global markets will thus remain extremely competitive for the
foreseeable future.

 

“The top markets
provide the greatest number of options to the greatest number of
perspectives,” said Kevin Imboden,
Director of Research for Cushman & Wakefield’s Data Center Advisory Group
.
“While one size sometimes does fit all, for certain specializations it’s
important to review and understand the factors most important to the specific
requirement and aim accordingly. Combined with those markets that have been
overlooked and underutilized, there is great potential for niche development
and secondary markets across the globe.”

 

About Cushman &
Wakefield’s Data Center Advisory Group

Cushman &
Wakefield’s Data Center Advisory Group is a global team of elite professionals
delivering specialized real estate solutions for mission critical users,
owners, and environments. With scalability, reliability, and security as a
driving force, our highly knowledgeable and responsive professionals guide
clients to make effective financial decisions. Our expertise includes
colocation facilities, control centers, greenfields, powered shell, and trading
floors. We lend additional value through our understanding of global dynamics
and their impact on local markets.

 

Please click here to download the
report.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a
leading global real estate services firm that delivers exceptional value for
real estate occupiers and owners. Cushman & Wakefield is among the largest
real estate services firms with 51,000 employees in approximately 400 offices
and 70 countries. Across Greater China, there are 22 offices servicing the
local market. The company won four of the top awards in the Euromoney Survey
2017 & 2018 in the categories of Overall, Agency Letting/Sales, Valuation
and Research in China. In 2018, the firm had revenue of $8.2 billion across
core services of property, facilities and project management, leasing, capital
markets, advisory and other services. To learn more, visit www.cushmanwakefield.com.hk or follow us on
LinkedIn (https://www.linkedin.com/company/cushman-&-wakefield-greater-china)

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