JLL said the hyperscale market is expected to grow by 20 per cent between 2021 and 2026 as more technology companies seek to meet the surge in demand for data processing and storage. Today, there are more than 300 new hyperscale websites under development worldwide, and the number is expected to exceed 1,000 by the end of 2024, up from around 500 five years ago.

According to JLL, Tokyo, Hong Kong, Singapore and Sydney remain well-positioned regional hubs with 3 quadrillion watts of total inventory and 765 trillion watts of capacity under construction. However, due to growing mobile phone usage, companies are increasingly looking at other hubs and marginal markets, including Jakarta and Mumbai.

Christopher Street, Managing Director and Head of Data Centers for JLL Asia Pacific, stated: "Just five years ago, campus-scale developments typically ranged around 50MW. Today, facilities of 100MW or larger have become commonplace. In 2022, the Asia Pacific region accounted for 26% of global hyperscale data center capacity. In mature markets like Singapore, Hong Kong, Tokyo, Shanghai, and Sydney, we're observing significant capacity gaps that are being rapidly addressed through large-scale new developments. Furthermore, emerging edge markets are attracting strong interest from cloud providers and hyperscalers. Given the region's growing influence in the global economy, substantial opportunities now exist across this marketplace.”

Commenting on the growth drivers of data centers in Hong Kong, Timmy Fung, senior director of data center capital markets in Greater China at JLL, said: "Despite the headwinds we have encountered in recent years, we believe Hong Kong remains an attractive location for data centers because of its unique and irreplaceable qualities such as a transparent real estate market, world-class telecommunications networks, and strong data privacy laws. The demand for data center capacity that supports artificial intelligence is growing rapidly. Most research reports indicate that the global artificial intelligence data center market is expected to grow at a compound annual growth rate of more than 25%. Considering that the Hong Kong government has been very supportive of artificial intelligence, we expect artificial intelligence companies to continue to expand their footprint in Hong Kong and drive the growth of the data center market in the region."

However, growth comes with challenges. Globally, 53% of data center operators struggle to find qualified candidates and 42% face challenges in retaining staff. In addition to talent, sustainability is now a top priority for data center developers, operators and investors, which includes addressing energy use and emissions. Legislation and self-regulatory initiatives such as the Singapore Data Center Moratorium are setting standards to mitigate the industry's impact on the climate.

Glen Duncan, Chief Research Officer, Asia Pacific Data Centres, JLL, added: "Sustainability has been a prominent theme since the outbreak of the epidemic. It is encouraging that many APAC businesses have started implementing goal-driven sustainability initiatives to make an impact on climate action for sustainable real estate. As more operators seek to use innovative solutions to improve energy efficiency, we are confident that the industry's green ambitions will be further advanced.

"For data centre users, outsourcing all operations or hiring third-party specialists can help alleviate workforce challenges. Those who can tackle the dual challenges of talent and sustainability at the fastest pace will benefit from a cost and operational efficiency perspective."