South Korea’s data centre IT load to increase by 700MW this year

Data centre vacancy is already approaching zero in the Seoul Metropolitan Area. 

Demand for data centers in Korea continues to grow driven by the surge in data consumption. According to Savills, with vacancy approaching zero for centers in the Seoul Metropolitan Area, new market players such as institutional investors, asset managers, and construction companies have entered the market. 

Growth of data traffic is accelerating with the adoption of new technologies such as artificial intelligence, big data, and cloud computing, generating unprecedented opportunities for data centers.

Here’s more from Savills:

Traditionally, the dominant form of data center in Korea has been enterprise data centers, which are owner-occupied by private corporations and the public sector, representing 72% of the total at the end of 2020. Only a few are operated by major telecommunications companies as Colocation Data Centers (28% of the total), which are centers leased to end-users for commercial purposes. 

However, robust growth in data consumption has led more corporations in the IT and finance industries to pursue enterprise data center development.

The increasing number of global cloud service providers in Korea has also impacted market dynamics. There are numerous projects under development or leased to the world’s top data center operators, such as Equinix and Digital Realty Trust, providing cloud infrastructure for global cloud service providers (CSP) including AWS, Microsoft and Google. 

Recently, institutional investors seeking to capitalize on exploding market growth have become active in new colocation data center developments. The market is becoming more segmented now with interest from institutional investors, asset managers, and construction companies.

Total stock and new supply

Total supply equal to 190MW of IT capacity was added to the market between 2019 and February of 2021, and an additional 100MW is in the pipeline by the end of 2021. 

According to the Korea Data Center Council (KDCC), the total capacity of colocation data centers reached 430MW in terms of IT load at the end of 2020, equal to 11% of total APAC IT load. Based on forecasts by Savills Korea, total commercial data center IT load in Korea is projected to increase by 700MW during 2021 – 2023 to represent 15% of total APAC capacity. 

Future data centers expected in Korea during 2021 – 2023 will be concentrated in the Seoul Metropolitan Area (“SMA”), namely Ilsan, Gasan, Sangam, Anyang, and Yongin. The districts of Ilsan, Anyang and Yongin are likely to post the highest growth, boosting capacity by over 100% by 2023 compared to February 2021.

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