MANILA, Philippines—Shifting geopolitics and a growing demand for Internet services are forcing data center companies to build a massive amount of capacity in the Philippines over the next 36 months, real estate market veteran David Leechiu said on Monday (March 28).
“There is an incredible amount of data center capital looking to transact here,” Leechiu, CEO of Leechiu Property Consultants, told reporters during a real estate trend briefing.
“The exact number is 38 companies. The amount of megawatts they’re talking about is pretty insane,” he said.
Data centers are critical for businesses that need data storage and cloud services. These are also notoriously energy-intensive facilities, so their capacity is measured in energy consumption rather than surface area.
The Philippine data center market remains understaffed as the country was once shunned by foreign companies due to its reputation for political instability and vulnerability to natural disasters.
Leechiu said foreign investors are taking a different view, not only because of the country’s growing and Internet-savvy population, but also because of the changing world order characterized by China’s increasing influence in the region.
“Philippines is one of the most solid western influenced countries and therefore [Western powers are thinking] we need to move some storage capacity from certain countries to the Philippines or turn a Philippine location into a redundancy program to complement what they have in the region,” Leechiu said.
Major telecom providers PLDT Inc. and Globe Telecom announced plans to massively expand their data center capacity by 100 MW each, while fiber internet giant Converge ICT Solutions announced it would build more data centers.
Earlier, Alibaba Cloud, owned by Chinese billionaire Jack Ma, announced it would build its first data center in the country, while Singapore’s SpaceDC said it would set up a 72-MW data center campus in Cainta, Rizal.
The recent spike in investment from new and existing data center operators creates a robust pipeline of facilities that will come online over the next 24 to 36 months.
But Leechiu said there was no guarantee demand would be that high.
“Whether the Philippines will absorb all that capacity is something we’ll have to wait and see,” he said.
“I’m just worried that 38 data centers wanting to set up a physical operation here might be too big for the demand that will actually be here by the time the data centers are ready,” Leechiu added.
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