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Growing demand for data centres in Singapore

There is increasing demand for data centres in Singapore, driven by the country's status as a regional hub, industry observers say.

SINGAPORE: With growing internet connectivity, there is increasing demand for data centres which house hardware servers to support networks and databases.

Industry observers say demand in Singapore is also driven by its status as a regional hub.

Keppel T&T already owns two data centres in Singapore and it is building a third. It says growth in internet and mobile usage, as well as cloud computing, is driving demand for data centre space.

Industry observers also add that the need for renewal and demand from overseas companies are also adding to the call for more space.

"A lot of data centres are coming in from areas which weren't expected due to unusual demands. For example, the effects of the Japanese tsunami had an impact on the number of Japanese organisations looking to have either a secondary, or in some cases, a primary data centre in the Singapore market,” said Simon Piff, associate vice president of enterprise infrastructure at IDC Asia Pacific.

“That doesn't look like it's going to go away in the near future because… a number of data centres -- about 22 per cent of data centres -- in Singapore are 10 years old or more. They're going to need to be refreshed soon so it looks like it is a healthy market for Singapore in the future."

Industry experts say the amount of information transmitted across networks is growing at a very quick pace. There is also a push to maintain multiple data centres to enable swift recovery from network failure and data loss.

Developers such as CitySpring Infrastructure and Keppel T&T are keen to tap into this growing segment. CitySpring is planning to build a data centre in Woodlands, in conjunction with Japan's Shimizu Corporation.

"Telecoms sector is one of our key sectors of focus,” said Tong Yew Heng, CEO of CitySpring Infrastructure Management.

“We are interested in infrastructure that will provide us with long-term stable cash flows. Therefore, we are focused on telecom infrastructure that can deliver long-term stable cash flows -- data centre is one example."

The Infocomm Development Authority is also building a data centre park in collaboration with the Singapore Economic Development Board and JTC Corporation. The complex is expected to provide some 1.1 million square feet of data centre space.

Both the IDA and CitySpring projects are scheduled for completion in 2016, while Keppel T&T's development is slated to be ready in the third quarter of this year.

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