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Data Centre Set to Boom in Thailand

November 23, 2020
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There is no doubt COVID-19 has acted as a catalyst in transforming our lifestyles - penetrating into how they live, work, eat and even sleep. CBRE, an international property consultant, reveals that as technology and various digital platforms have become firmly embedded as one of the key factors in the fight against COVID-19 coupled with a huge increase in online penetration, there has been vigorous demand for data centre facilities globally.

Mr. Adam Bell, Head of Transaction & Advisory Services – Industrial & Logistics, CBRE Thailand, comments “While China is home to the largest data centre market in the Asia Pacific region, other key players include Australia, Japan, Singapore and Hong Kong. Thailand, on the other hand, is poised for further growth.”

“Although neighbouring countries like Singapore and Hong Kong are credible for their services and business settings over the years, they are facing land constraints for such infrastructures. Singapore’s current regulation is restricting new data centre developments, strictly restraining the issuance of more data centre licenses.”

It is an opportune time for Thailand. This, together with numerous Board of Investment (BOI) tax and non-tax privileges, would help incentivise investors. Thailand’s centralised location also makes it plausible to expand data centre services to surrounding countries. Its promoted Eastern Economic Corridor (EEC) is also situated just 30 kilometres away from undersea cables yet over 100 metres above the sea level - minimising flooding risks.

Moreover, the implementation of 5G technology in the near future will pave the way for Internet of Thing (IoT) infrastructure in Thailand. There will be change in the dynamics of digital technology utilisation due to its much higher bandwidth, lower latency, and higher connection density. It is definite that the rollout of 5G would require adaptations in both the deployment and design of new data centres to support 5G frequencies.

According to CBRE Research, big players such as Frasers Property Thailand are speculating the ‘new normal’ will continue to drive the growth in demand for data centres. Its joint venture with ST Telemedia Global Data Centres will offer 30,000 square metres in the first phase for clients such as cloud operators, e-commerce businesses, and financial institutions.

South Korea’s KT Corporation also plans to infiltrate the Thai market by H2 2021 and provide a high standard of services to global cloud companies.

“To compete in this fast-growing market, Thailand must secure its place by improving the expertise needed to operate data centres and to ensure high cyber security standards thus, increasing our credibility. As data centres require high and stable power and water supply, infrastructure providers must ensure these utilities are guaranteed. New policies should also be implemented to promote business competition domestically. As yet, data centres are a relatively new and uncharted asset class. The fullest potential of data centres and its full market cycle is yet to be seen,” added Mr. Bell.

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