Data centres attracting keen interest from real estate investors
New opportunities are poised to emerge in Thailand
Data centres have emerged as a sector with a strong growth potential that property developers and investors are keen to tap into, says property consultant JLL.
The rise of digitalisation, Internet of Things, cloud computing, and e-commerce has generated an enormous amount of data and consequently strong demand for data centres -- spaces with specialty infrastructure and service to house computer servers, IT systems and associated components.
While many companies manage data in-house, more of them are outsourcing their data operations to third-party providers of data centres.
In Thailand, data centre operations are not new businesses. The latest data from JLL indicates that there are currently over 24 data centres operated by third party providers in Thailand such as Supernap Thailand, STT GDC, Frasers Property Thailand and NTT Communications.
Subyagorn Sansugtaweesub, Head of Industrial and Logistics at JLL, says “We have received an increasing number of enquiries from both local and international real estate investors looking for opportunities in Thailand’s data centre sector.”
“However, data centre operations require a special expertise, and so does the development of a data centre project. As a result, real estate investors are exploring various options other than direct investment in data centre assets, from development partnerships with data centre operators to mergers and acquisitions,” he adds.
With more data centre firms looking to improve and upgrade their technology and cloud strategies, JLL also expects the need for fresh capital from these operators which will likely translate into more real estate opportunities on a sale and leaseback basis.
Michael Glancy, Country Head of JLL, says “While some core real estate sectors in Thailand are facing a challenging time, investors are looking to diversify their portfolios. We expect investment activity in alternatives sectors such as data centres to increase in the near future, the same trend that we have seen globally.”
According to JLL, global data-center investment rose to USD47.1 billion in 2021 from USD34.5 billion in 2020. In Asia Pacific, data centre investment transactions reached USD5.4 billion in 2021, up 30% year-on-year and more than double 2019 levels.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 98,000 as of December 31, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.