KMC Savills | Data Center Growth in PH Real Estate

The Philippines is pegged to be one of the biggest data center hubs in Southeast Asia as the global economy keeps up with the demand for faster internet and improved digital capabilities. According to local telecommunication providers, more global tech companies are looking to build data centers and digital facilities in the country to meet regional demand amid the challenges posted by COVID-19.

Due to the digital transformation triggered by the pandemic, numerous companies have been investing heavily in their technological capabilities. The boom of e-commerce and the standardization of cashless transactions have pushed businesses to improve their digital services as much as internet providers also keep up with the increase in the demand for faster internet.

Southeast Asia’s Biggest Data Center Hub

In 2021, KMC data show that this industry will drive more movement in the real estate market in the Philippines. Experts note that as other major data center hubs in the region, including Singapore and Hongkong, are experiencing setbacks; the country can take advantage of its adequate land supply.

The country also logged one of the highest growth rates as an emerging data center market alongside Malaysia and Thailand for the digital profile of the Filipinos. As the home of the second-largest subscriber base in the region, ‘hyperscalers’ are motivated to build their technology and communication infrastructure throughout the archipelago.

More than the number of internet users, Filipinos are also a ‘sizeable tech-savvy population with stronger digital appetite and adoption to technology’. In the latest statistics, the Philippines has 74 million internet users that spend 10.5 hours online, the longest in the world.

Data Center Demand Drivers

The pandemic has also catapulted the need for online platforms, software, and websites that can host collaborative and interactive activities that were traditionally held face to face. KMC has identified the top data center market demand drivers and activities in the country that is expected to still grow through the coming time periods.

The adoption of cloud-based services to support remote and flexible working during lockdowns is one of the biggest demand drivers for the DC market in industrial real estate. The Big Data IoT (internet of things) phenomenon also significantly impacts this sector as large amounts of data on a real-time basis are being generated, processed, and stored.

Innovations in technology pushed by the pandemic, such as Artificial Intelligence and Virtual Reality, are also active demand drivers in the sector.

Data Center Market in the PH: Challenges to Address

KMC Chief Operating Officer and workplace strategist Cha Carbonell noted in a previous webinar that in order to capitalize on this growing market and demand, the Philippines should address some of the challenges that can hinder the growth of the sector.

Carbonell pointed out the competitive electricity cost and the need for more sophisticated spaces needed to house these high-tech infrastructures. Information systems should also be improved for better storage of data and maintenance.

Learn more about the latest trends in real estate and the Philippine property market. Contact Clarisse Miranda at (+63) 917-136-5000. For inquiries and more information, reach out to us by calling (+63) 2-8403-5519 or sending an email to [email protected].