Industrial parks urged to capture demand for data centers

Industrial park developers are urged to capitalize on the demand for data centers by highlighting the perks of locating in their properties, Colliers Philippines said.

In its Keeping up with demand: Developers plug into thriving data center demand report released yesterday, Colliers Philippines said it has observed a growing interest for data centres in the country.

“The Philippines is considered one of the largest early adopters of digital technology, be it for social media, e-commerce, education, and financial services. With the large tracts of data needed to effectively optimize the exchange of information, the Philippines is now being touted as the next viable destination for data centre operations,” said Paul Chua, Colliers Philippines Director for Capital Markets & Investment Services.

Data centers are physical facilities used by enterprises to digitally house their critical business applications and information. They are designed based on a complex network which allows shared access to the applications and data.

Colliers Philippines said the growing interest for data centers in the country 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.

“Colliers encourages developers of industrial parks to take a proactive stance in cornering demand from data centre operators,”the property services firm said.

“Industrial parks should be preferred by most data centre operators because they are already built with redundancy in mind, with multiple power and utility providers to support data centre uptime,”Colliers added.

It said developers should highlight other features of industrial parks such as the potential for customization and subsidized utility costs including electricity.

Colliers said the Cavite, Laguna, Batangas (CALABA) corridor is seen to be a popular option for investors as it is home to the majority of the country’s industrial parks.

One of the existing data centers in the CALABA area is Globe in Gateway Business Park in Cavite, while planned developments include YCO Cloud Centers in Light Industry and Science Park 4 in Batangas and PLDT’s new data center facility in Sta. Rosa, Laguna.

The property services firm also suggested data center operators to consider industrial spaces in Northern Luzon.

“In our view, demand for data centre facilities in areas such as New Clark City and Tarlac remains underserved,”Colliers said.

Apart from industrial parks, Colliers said the demand for data centers may also positively influence office space absorption.

It cited that in 2021,Beeinfotech leased the entirety of Campus One office tower in Robinsons’ Bridgetowne East township in Pasig City for the establishment of its data center facility called The Hive.

“Developers should consider offering more built-to-suit office spaces or redeveloping old office assets in anticipation of the potential growth in the sector,”Colliers said.

Citing data from Arizton, the report highlighted that investments for Philippine data centers are projected to reach $635 million in 2027, a 113 percent increase from 2021.