Property services firm Colliers Philippines sees data center investments doubling to over P35 billion in five years on booming cloud services and e-commerce in the global capital of internet usage.
In a July 5 report, Colliers considered the Philippines “one of the prime emerging data center markets in Southeast Asia,” forecasting a 13.4-percent annual increase in industry investments from 2022 to 2027.
Data centers are power-intensive facilities that operate nonstop, provide crucial data storage and information technology services to businesses.
“Colliers Philippines is seeing a growing interest for data centers in the country,” said Paul Chua, Colliers director for capital markets and investment services.
“In our view, this should be sustained by the continued rise of e-commerce transactions, emergence of smart cities, proliferation of cloud computing technologies, need for 5G connectivity, increasing financial inclusion and the government’s push to digitize its processes,” he added.
New players
The report noted that most data centers were controlled by top telecommunications providers, PLDT Inc. and Globe Telecom, but a host of new players was entering the scene.
These included fiber internet giant Converge ICT Solutions Inc. and telco challenger DITO Telecommunity as well as Chinese billionaire Jack Ma’s Alibaba, Space DC and YCO Cloud Centers.
Demand was buoyed by the country’s internet user base of 76 million people, who spend a record average of 10.5 hours online per day, according to data in the Digital 2022: Philippines report.
“The massive usage of social media should also support growth of data demand in the Philippines,” Colliers noted.
The growth of e-commerce and the rapid development of new industrial parks would help lure investments but challenges remain such as slower internet speeds in the Philippines versus regional peers and the high cost of power.
Meanwhile, Colliers said data center locators were also moving to provincial locations such as Cavite, Cebu and Davao due to limited land supply in Metro Manila.
“In our view, the Calaba (Cavite, Laguna, Batangas) corridor will be a popular option for investors as it is home to the majority of the country’s industrial parks,” Colliers said.
Data centers in the area include Globe’s facility in Gateway Business Park in Cavite. New projects were YCO Cloud Centers in Light Industry and Science Park 4 in Batangas and PLDT’s data center facility in Sta. Rosa, Laguna.
“Data center operators may also consider industrial spaces in Northern Luzon. In our view, demand for data center facilities in areas such as New Clark City and Tarlac remains underserved,” Colliers said. INQ