Hyperscalers and investors are seeing heightened interest in Manila as location for their projects, a report by real estate management and consultancy firm showed.

The Q3 2022 Data Center Report published recently by Knight Frank in partnership with DC Byte, the leading data center research and analytics platform, focuses on nine rapidly emerging markets in Asia Pacific, namely Osaka, Melbourne, Jakarta, Manila, Hanoi, Taipei, Hyderabad, New Delhi, and Chennai.

The interest in these locations as measured by total supply in energy consumption grew from just under 700 MW five years ago, to over 3,000 MW today, a meteoric increase of over 300 percent. In the first three quarters of 2022 alone, over 600 MW of new IT capacity has been added.

According to the report, data center activities for Southeast Asia have ramped up in Manila, Taipei, and Hanoi. Recently, AWS announced local zones in both Manila and Hanoi this year and is in the process of rolling them out. Current key players in these markets mainly comprise the local telcos, with a handful of regional joint ventures such as STT-Globe in the Philippines and NTT-VNPT in Vietnam.

According to the report, Manila has approximately 163.81 MW of IT capacity, including live, early stage, committed, and under construction. Meanwhile, Taipei has an estimated 131.81 MW and Hanoi 54.25 MW.

Examples of hyperscalers are Amazon AWS, Microsoft Azure, Google GCP, Alibaba AliCloud, IBM, and Oracle.

Monica Gonzalez, Santos Knight Frank’s Data Center Lead, said: “During the last two years, Santos Knight Frank has seen an incredible level of inquiries from data center investors and operators in the Philippines equivalent to more than 220 MW. Players are looking for the next area of growth in emerging markets in Southeast Asia, and the Philippines – with its digital-user demographics – is among the preferred locations.”

Other emerging markets in Asia Pacific are registering high-growth trajectory. In India, this was partly driven by government policies, including easier access to credit and other incentives to boost data center investment. Across the nine locations studied, Melbourne, Jakarta, and Osaka have stood out, with each now registering more than half a gigawatt of aggregate IT supply.

Fred Fitzalan Howard, Data Center Lead APAC at Knight Frank, said: “The insight from our latest report reinforces Asia Pacific’s position as the most exciting market in the global data center industry. More businesses are speeding up their digital transformations, and the demand for cloud services and lower latency has proliferated, resulting in cloud providers sourcing colocation and self-build facilities in previously overlooked cities. As these secondary cities continue to establish themselves as data center locations, opportunities will continue to arise across the M&A and development space.”

James Murphy, APAC Managing Director at DC Byte, added: “Previously the Asia Pacific region was dominated by a handful of 'Tier 1' markets. This is no longer the case as the trend for decentralization has seen both hyperscalers and data center operators move to new markets. The latest report highlights these new markets which we expect to continue to grow in parallel with some of the region’s more established hubs.”