APPD Market Report Article
SydneyAugust 25, 2022
Christopher Street, Head of Data Centres, Asia Pacific
Healthy cloud adoption drives hyperscale demand growth
- A strong supply pipeline continues to be met with robust demand due to increasing levels of cloud adoption.
- Government initiatives and corporate sector outsourcing continue to underpin the robust demand, alongside rising adoption of technology for hybrid-working, AI and data analytical tools across sectors.
Robust supply on the horizon
- There is a significant amount of stock under construction, equal to 42% of current built-out capacity.
- Operational stock remains weighted towards the Western Sydney sub-region, which currently accounts for around 40% of operational data centre capacity.
Sydney attracts cloud and colocation players
- Equinix and PGIM Real Estate, the real estate investment and financing arm of PGIM, have announced the opening of the first xScale data centre in Sydney, named SY9x. They formed a USD 575 million joint venture in March 2022.
- In 2021, global cloud players announced their plans to set up hyperscale data centres in Sydney. They are expected to commence construction in 2022.
Outlook: Private and public sector cloud demand to be met by supply
- Data sovereignty is likely to remain an important issue. Three key government departments (ASIC, ACMA and Home Affairs) have left Global Switch’s Sydney facility to meet the July 2022 deadline for sensitive data storage, as outlined by the Federal DTA (Digital Transformation Agency).
- As a result, major corporate users are anticipated to place more importance on security implication considerations when using their data storage providers.