Global Data Centre Market Hit Us4 Tril 2030 Apac Sees Bulk 2024 Investments Knight Frank

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Knight Frank predicts continued growth for the global data centre market in the next five years, with a strong rebound expected in 2024 after a slowdown caused by an interest rate hike in 2023. In their latest Global Data Centres Report, the real estate firm states that transactions for data centre properties reached US$31.8 billion ($42.9 billion) in 2024, a 118% increase from the previous year. The average value of these transactions in 2024 was US$75.4 million, a 15% increase from the previous year and 44% higher than pre-Covid levels in 2019. Asia Pacific (APAC) accounted for 70% or US$15.5 billion of the cross-border data centre deals in 2024, making it the leading region for data centre investments. The rapid growth in the global data centre market is expected to continue in the next five years, with an estimated annual CAGR of 18% and a projected total value of US$4 trillion by 2030.Read also: Two-storey industrial property along Tuas Link 4 for sale at $55 milAdvertisementAdvertisement This optimistic forecast is driven by the increasing demand for AI-optimized infrastructure, cloud services, and enterprise digital initiatives. Knight Frank predicts that the global data centre capacity will increase by 46%, or 20,828 megawatts (MW), in the next two years. By 2030, the capacity is expected to expand by 177%. The APAC region is expected to contribute 4,174 MW of capacity by 2027, with planned investments of US$58.7 billion. Among the key contributors is Tokyo, which is set to receive US$4.1 billion in investments in the next two years, leading to a capacity growth of 25% or 295 MW. Another region to expect notable growth is Johor in southern Malaysia, with a projected capacity increase of 85% or 335 MW by 2027, supported by US$4.7 billion in investments.On the other hand, Singapore remains a major player in the data centre market, despite regulatory and land constraints. However, due to a vacancy rate below 1%, transactions in the city-state have shifted towards smaller deals, causing an increase in prices. Fred Fitzalan-Howard, Knight Frank’s APAC head of data centres, states that the region is expected to add approximately 8 gigawatts of new capacity in the next three years, with 25% of this dedicated to AI workloads. Although this is lower than the global average, it still represents a pipeline of US$24 billion in capital expenditure and 20-30 million sq ft of real estate. According to Fitzalan-Howard, these initial investments will pave the way for more AI infrastructure roll-outs in the region. However, he also emphasizes the need to address varying regulatory frameworks and adapt to US export controls on AI chips to maximize opportunities in this rapidly evolving sector. Read also: Keppel to divest Genting Lane data centres to KDC REIT for $1.38 bilAdvertisementKeppel signs MOU with Mitsui Fudosan to develop data centres in Japan and Southeast AsiaJohor benefitting from a data centre boom SC Capital Partners forms data centre investment programme with Abu Dhabi Investment Authority subsidiaryThe global data centre market is poised for rapid growth in the next five years, bouncing back strongly in 2024 after a slump caused by an interest rate hike in 2023. According to the latest Global Data Centres report by Knight Frank, the transaction volume for data centre real estate worldwide reached US$31.8 billion ($42.9 billion) last year, marking a significant 118% increase from the previous year. The report also revealed that the average transaction value in 2024 was US$75.4 million, which is 15% higher than the previous year and 44% higher than pre-Covid levels in 2019. APAC dominated data centre investments, with US$15.5 billion – or 70% of cross-border data centre deals – taking place in the region.The global data centre market is expected to continue to see strong growth in the coming years, with an estimated annual CAGR of 18% and a total market value of US$4 trillion by 2030. This positive outlook is driven by the increasing demand for AI-optimized infrastructure, cloud services, and enterprise digital initiatives. Knight Frank also predicts a 46% increase in global data centre capacity in the next two years, equivalent to 20,828 megawatts (MW). By 2030, the capacity is estimated to expand by 177%.In terms of regional growth, APAC is expected to add 4,174 MW of capacity by 2027, with US$58.7 billion in planned investments. The top contributor to this growth is Tokyo, which is projected to receive US$4.1 billion in investments over the next two years and increase its capacity by 295 MW, representing a 25% growth. Johor in southern Malaysia is also expected to see significant growth, with a projected capacity increase of 85% (335 MW) by 2027, supported by US$4.7 billion in investments.In contrast, despite facing regulatory and land constraints, Singapore remains a key market for data centres. However, with a vacancy rate below 1%, transactions in the city-state have shifted towards smaller deals, leading to an increase in pricing. Fred Fitzalan-Howard, Knight Frank’s APAC head of data centres, expects the region to add 8 gigawatts of new capacity in the next three years, with 25% dedicated to AI workloads. Although lower than the global average, this still translates to a pipeline of US$24 billion in capital expenditure and 20-30 million sq ft of real estate. Fitzalan-Howard also highlights the need to address various regulatory frameworks and adapt to US export controls on AI chips to maximize opportunities in this rapidly evolving sector. Read also: Keppel to divest Genting Lane data centres to KDC REIT for $1.38 bilAdvertisementKeppel signs MOU with Mitsui Fudosan to develop data centres in Japan and Southeast AsiaJohor benefitting from a data centre boom SC Capital Partners forms data centre investment programme with Abu Dhabi Investment Authority subsidiary