Monday, May 19, 2025

Surge in data center investments, revenue seen

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The Philippines , which currently ranks second among Southeast Asian countries in terms of data center growth, recorded $298 million in investments in the sector in 2021.

This is expected  to more than double to $635 million in 2027,  or  a growth 13.4 percent per annum between this year and 2027, Colliers Philippines said citing a report from Arizton Advisory & Intelligence.

Co-location market revenue is expected to reach $180 million by 2027, the report added.

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Structure Research in a separate report said the Philippine data center colocation market is estimated to be worth $134 million this year.

The sector will grow steadily at a 25 percent CAGR compound annual growth rate through 2027, mostly driven by the hyperscale market, according to Jabez Tan, head of research at the research firm.

Anticipating the demand, PLDT, through its ICT arm ePLDT, is leading the capacity build with the construction of its 11th and largest hyperscale data center to date. VITRO Sta. Rosa is the first in a series of data center builds totaling a power capacity of 100MW.

“We continue to build new facilities to serve the market demand that comes with the digitalization of the country while expanding our capacities in existing sites such as VITRO Makati 2, Paranaque, and Clark,” said Amil Azurin, PLDT Enterprise Vice President and head of product management for the disruptive business group.

PLDT Group’s latest investment in the Jupiter Cable System supplements the upcoming VITRO Sta. Rosa, as both world-class infrastructures further reinforce the country as Asia-Pacific’s next hyperscaler hub. Jupiter is now the fastest cable system between the Philippines and the US. It will fortify the international cable network diversity for the country and triple PLDT’s existing international network capacity to about 60 Terabit/s while directing massive data to PLDT’s network of data centers.

Meanwhile, Joey Bondoc, senior research manager at Colliers, sees the expected surge in demand for data centers  as an opportunity for real estate as data centers which require physical space   to store information, are potential occupiers.

Bondoc cited Beeinfotech which in 2021 leased an entire office tower in Pasig  for the establishment of its data center.

But to take advantage of the opportunity, Bondoc said developers should consider offering more built- to-suit office spaces or redeveloping old office assets.

Colliers also encourages developers of industrial parks to take a proactive stance in cornering demand from data-center operators.

The conversion of brownfield assets should also be considered, it added.

According to Bondoc, joint ventures will be a popular route among foreign and local players.

At present data centers in the Philippines are   mostly  owned by telecommunications companies including Globe and ePLDT.

But in recent times, more local and international players have invested in the domestic data center market including Converge, DITO Telecommunity, Beeinfotech, Alibaba, YCO Cloud Centers and SpaceDC.

While Metro Manila is the primary hub for data centers in the Philippines, Colliers said data centre operators are expanding in provincial locations like Cavite, Cebu and Davao.

Bondoc sees the  CALABA corridor as  a popular option for investors.

He said industrial spaces in Central and Northern Luzon can also be explored particularly  New Clark City and Tarlac which remain underserved.  Irma Isip and Myla Iglesias

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