PH property market seen benefitting from growing data center demand

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Leechiu Property Consultants (LPC) said the property market is poised to benefit from the growing global demand for data storage as the Philippines is positioned as one of the global data center hubs.

Roy Golez, LPC director for research and consultancy in a report on released last December, described the Philippines as a “rising star” in the data center market amid an “expanding digital infrastructure, accelerated adoption of 5G, and advancements in artificial intelligence (AI).”

Golez said 1,364 megawatts (MW) data center capacity is in the pipeline which reflects investor confidence in the Philippines.

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Currently, the Philippines has a capacity of 182.2 MW. The biggest players are ePLDT with 122 MW and Globe Telecom, including its STT-GDX expansion.

The National Capital Region hosts 11 data centers, followed by Cebu with three, and Davao, Cavite and Laguna with two each.

“An additional 161 MW is expected by 2025, reflecting continued capacity expansion,” Golez said, noting there is room for growth in the Philippines given its standing among Southeast Asian peers whose capacity levels range from 1.53 to 18.77 watts per capita.

Malaysia leads with 18.77 watts, followed by Indonesia with 1.81 watts. The Philippines ranks low at 1.53 watts per capita which highlights “significant growth potential compared to developed markets like Singapore, which boasts 187.67 watts per capita,” Golez said.

“With rising demand from global players, enhanced digital infrastructure, and supportive government policies, the industry is poised for long-term growth. The sector’s upward trajectory is fueled by increased adoption of 5G technology, AI-driven innovation, and ongoing market expansion initiatives,” he added.

Jones Lang Lasalle (JLL), another property consultant, noted the need for more data capacity banks saying the “continued transition to the cloud, growth in the Internet of Things (IoT), growing data sovereignty and residency regulations, and the expanding amount of data that consumers and businesses generate are fueling the rapid development of data centers globally.”

According to JLL, the next five years will see consumers and businesses generating twice as much data as all the data created over the past 10 years.

“In response, total storage capacity in data centers and endpoint devices will grow from 10.1 zettabytes (ZB) in 2023 to 21.0 ZB in 2027, for a five-year compound annual growth rate (CAGR) of 18.5 percent,” it said.

“The growing need for storage translates to growing demand for data center space, fueling rapid development. In the past decade, developers have steadily increased the capacity of new colocation and hyperscale data centers. Structure Research estimates that global colocation MW will grow at 15.2 percent CAGR over the next five years,” it added.

It pointed out that most new data centers built 10 years ago had a critical IT load capacity of less than 10 MW but today, developers announce new builds of 100 MW or more.

Realtor AyalaLand Logistics Holdings Corp. (ALLHC) has been building its data center capacity in the country, recently topping off the first building of its 36 MW data center project, ML1 Data Center, under A-FLOW in Sta. Rosa, Laguna.

A-FLOW is the joint venture partnership between ALLHC and FLOW Digital Infrastructure. The first phase of the data center will have an initial 6 MW capacity ready for service.

ALLHC officials earlier said the Philippines enjoys a sweet spot in the search by tech companies for alternative sites to mature markets like Singapore, China, Hong Kong and Australia.

 At the same time, the Philippines can leverage on the concern for data privacy in markets like China to attract potential locators into the Philippines.

ALLHC targets to service firms like Amazon, Alibaba, Facebook, Meta, Google and Microsoft for its data center.

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