Demand is driven by hyperscale growth and decentralisation trends

• Demand is largely driven by hyperscale, attracting international players, especially from the US, while domestic hyperscalers continue to grow and occupy colocation capacity.
• External factors are also significantly contributing to the uptrend, especially market decentralisation, with investment going beyond the traditional top tier markets of Tokyo and Hong Kong.

Significant supply uptrend

• Supply is on an upward trend, with the current 515MW of capacity set to approximately triple after the 900MW in the pipeline (including announced) comes online.
• Noteworthy supply includes the emergence of international providers with operational capacity in 2022, i.e. Digital Edge, Digital Realty, and Equinix.

Robust demand attracts global players

• Investment and development continue to grow to wider areas, especially towards Busan due to their advantage of a subsea cable.
• High market activity was recorded due to the increasing number of international as well as domestic players. Examples include new developments and site acquisitions, JV formations and renewable energy development.

Outlook: Continuous strong demand expected to absorb new supply

• Although occupancy remains strong, a quick dip may occur, especially for hyperscale, in the next couple of years before recovering fast in the subsequent years.
• Significant new supply is expected in the pipeline, for instance by KT Cloud, Empyrion and STT GDC.