Data centre parks: The future of sustainable and orderly data centre development

Data centre parks and clusters offer unique benefits to all data centre ecosystem participants:

• Investors can leverage economies of scale within specialised environments, driving cost savings.

• Operators benefit from data centre parks' central position as connectivity hubs, ensuring smooth interconnectivity and cost-effective operations.

• Users value tailored solutions, scalability, and enhanced disaster recovery options.

• Local authorities appreciate optimised resource utilisation , stimulating local economies through tech investments and employment opportunities.

• Data centre parks also attract tech talent, fostering collaboration and contributing to economic growth.

Data centre parks can be found across the Asia Pacific (APAC) region from Inzai City in Japan, to Navi Mumbai in India, and Sedenak Tech Park in Malaysia. These parks offer strategic locations, robust infrastructure, renewable energy initiatives, ample land availability, and government support. Governments play a key role as enablers through various strategic initiatives including tax incentives, land allocations and the provision of infrastructure such as power.

Data centre parks and clusters offer resource optimisation, interconnectivity, growth opportunities, and appeal to tech talents. These facilities shape the data centre landscape through higher efficiencies, promising financial gains, operational excellence, economic prosperity, and vibrant tech talent ecosystems.

A data centre park is, quite simply, a purpose-built area designed to house and operate multiple data centres often in close proximity.

These parks are typically equipped with the infrastructure needed for data centre operation, including power supply, robust security, and fiber connectivity.

Thus far, most physical groupings of data centre facilities in Asia Pacific are in the form of loose clusters rather than planned demarcated parks specifically designed for data centres. However, this situation is rapidly changing as rack densities increase and the size of new data centres far exceeds those of the past. 

“Data centre parks and clusters offer resource optimisation, interconnectivity, growth opportunities, and appeal to tech talents. These facilities shape the data centre landscape through higher efficiencies, promising financial gains, operational excellence, economic prosperity, and vibrant tech talent ecosystems.”

Glen Duncan
Head of Data Centre Research, Asia Pacific

Data centre parks provide a hassle-free and scalable environment for businesses to store and manage their IT load, while offering high-speed connectivity and reliable resources for the operations.

In contrast, standalone data centres need to source and process the requirements for development and operations themselves. These requirements may include land zoning conversion, site searches, soil testing, power and water sourcing, and fiber connectivity application and installation.

Data centre parks with pre-approved power represent an attractive option for investors and operators seeking to de-risk projects at a time when securing new large power allocations has become more competitive and challenging.

Locating in a data centre park or cluster can provide significant risk alleviation for investors, operators and end users.

Data centre parks and clusters serve as magnets for tech talents seeking rich and broad tech ecosystems. The presence of skilled IT professionals gravitating towards these parks creates a collaborative environment that benefits both users and operators.

The influx of tech talent to the area enhances the local workforce, contributing to overall economic growth. Governments can support the development of this ecosystem of tech talent by creating special economic zones that include loosening work visas and providing tax incentives.

Local authorities can appreciate the benefits of optimised resource utilisation within data centre parks, promoting sustainable land and utility use. Data centres are large consumers of a nation’s power supply. New projects involving sustainable power generation can be strategically concentrated adjacent to parks for optimised effect.

In addition, the economic impact is evident as tech investments and employment opportunities arising from the data centre park and sector development will stimulate the local economy.

The data centre industry is generally not a large employer once the facility is in operation. However, construction employs many people. In addition, without the existence of data centres, the cloud and digital ecosystem cannot exist and the data centre is effectively the backbone of the cloud. It is here where the real large scale employment benefits for a nation exist.

Each software application developed as part of an innovative digital economy can result in many jobs and there are many software applications. The streamlined regulatory framework intrinsic to these parks also fosters growth while ensuring compliance and oversight.

Investors and operators can be sure that they are meeting regulatory compliance, thus again de-risking and fast-tracking projects. Regulatory compliance is particularly becoming critical nowadays to ensure that all stakeholders meet environmental, social and governance (ESG) obligations.

Moreover, these data centre parks and clusters serve as magnets for tech talent seeking rich and broad tech ecosystems to hone their skills and attractive employment benefits as a result of both employer incentives and government initiatives.

The presence of skilled IT professionals gravitating towards these parks creates a collaborative environment that benefits both users and operators. This also enhances the local workforce, contributing to overall economic growth.

In essence, the concept of dedicated data centre parks and clusters brings multi-faceted advantages to stakeholders across the spectrum.

The collaborative setting, resource optimisation, interconnectivity options, growth prospects, and the appeal to tech talents underscore the significance of these parks in reshaping the data centre landscape.

As this approach gains momentum, it holds the promise of enduring benefits: from financial gains to operational excellence, economic prosperity, and a thriving tech talent ecosystem.

For visual simplicity, the shown clusters are non-exhaustive. Hover/click to learn more.

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Japan’s strategic location cements its position as an essential nexus connecting submarine cables interlinking major regions including China, Southeast Asia, and North America.

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Greater Tokyo, locations like East Tokyo (including Inzai City), West Tokyo (including Mitaka and Tama), Central Tokyo (including Otemachi and Koto), and Saitama in the north, are major hubs for data centre developments.

Situated between Tokyo and Narita Airport along two major train lines, Inzai City offers a cluster of data centres in a suburban setting where land availability is high, unlike denser locations such as Central Tokyo and Saitama. Its inland location, ample flat land, firm soil, underground loop power receiving systems, help minimise the risk of natural disasters.

This was demonstrated circa 2018 when it remained relatively safe from the typhoon that struck Chiba's coastal areas. Being on the Shimousa Plateau also means Inzai has low seismic risk.

The development project that includes Inzai City (Chiba New Town), has eventually led to the growth of industrial and data centre developments in the area. This project ensures reliable infrastructure and aims to make the area self-sufficient.

Inzai City is thus involved in renewable energy initiatives, with lines of houses and shops with fixed solar panels, some of which capable to generate up to 13kW. A solar power plant developed by Sparx, a prominent renewable energy player in the area, adds an additional 12.8MW of capacity to Inzai's power supply.

To meet the increasing power demands of current and upcoming data centres, a new substation (275/66kV) is being built less than 3km away from the existing 154/66kV substation. It is expected to be operational by 2024. In addition, Inzai City is flanked with several cable landing stations at the north at Ibaraki prefecture, and the south near Tokyo Bay.

The conducive environment in Inzai City has thus far attracted five of Japan’s major players including several three major global hyperscalers. Nevertheless, Inzai City continues to offer available pockets of land suitable for future data centre development.

Navi Mumbai, a planned city near Mumbai, is gaining momentum as a prominent data centre hub. Its strategic location, solid infrastructure, government support, and increasing demand for digital services make it an attractive destination for data centre development.

With India recording the highest growth in the region in terms of submarine cable additions, connectivity is a major advantage in Navi Mumbai as well. The city’s advantageous position on the eastern coast of India allows for easy access to both domestic and international fiber networks. Nine of the 18 submarine cables in India lands in neighbouring Mumbai.

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As Navi Mumbai has access to the cables, the area has the densest cable network in India. With proximity to Mumbai's financial district and technology parks, Navi Mumbai offers convenient connectivity options. In addition, the government has been aggressive in providing connectivity to citizens, including the recent budget approval for last mile fiber optic cable to all village homes.

With three main substations along Navi Mumbai’s spinal and national roads, and renewable power plants dotting numerous areas further east, the city boasts a reliable power supply and access to renewable energy sources like solar and wind power. India is targeting 50% of its power supply to be from renewable sources. In addition, Navi Mumbai has a relatively low risk of natural disasters as it falls under seismic zone 3 (out of 5) which effectively means moderate level.

The government and local authorities provide incentives such as tax benefits, simplified land acquisition procedures, and subsidised power tariffs to attract data centre investors. These may come in the form of aid or relaxation on land conversion charges, or waivers of electricity duty. This support has played a vital role in establishing Navi Mumbai as a data centre destination.

Navi Mumbai offers great opportunities for data centre development and expansion with its abundance of land availability which can accommodate large-scale data centre projects. Additionally, the city’s real estate prices and operational costs are more competitive compared to locations such as Mumbai, Chennai, and Bangalore. 

Sedenak Tech Park (STeP) is one of the prominent data centre parks in Johor, a southern state of Malaysia, that is regionally recognised as a major location for data centre and data centre park developments. Other data centre parks nearby include YTL Green Data Centre Park and Nusajaya Tech Park.

SteP is being developed by the government agency Jcorp with its first phase spanning 700 acres. This spearheads a 7,290-acre masterplanned township development, with STeP being its first phase. This ensures that infrastructure in the area is robust and able to support various developments including multiple hyperscale data centres.

The Malaysian government has in recent months made significant moves in the renewable energy industry that will catapult the nation in this sector, including endorsing the autonomy of exporting renewable energy.

A national initiative was recently launched to facilitate the country’s large-scale renewable energy transition, with 10 catalytic projects outlined to have renewable energy accounting for 70% of the nation’s energy source by 2050.

One of the projects is a 1GW hybrid photovoltaic solar farm — to be steered by Malaysia’s sovereign wealth fund Khazanah Nasional — which will be located in Johor. In addition, Johor, and thus STeP, benefit from more than 20 submarine cables in the country, with several more to come in the next few years. This is further topped with the area’s close proximity to even more connectivity in data centre clusters in South-East Asia.

Major APAC and global data centre operators and hyperscalers continue to increase in number and capacity within STeP, as well as in the nearby data centre parks, particularly YTL Green Data Centre Park and Nusajaya Tech Park.

STeP has a low risk of natural disasters, large land availability, highly skilled talents, and progressive government initiatives including large scale renewable energy. Its strategic location with an abundance of connectivity within and with nearby countries, the variety of offerings by STeP makes it one of the most prominent data centre parks in the region.

The second phase of STeP will be ready by 2024, spanning 640 acres. This park expansion will largely utilise renewable energy, primarily from a photovoltaic solar farm. A joint venture between Mitsui & Co. and JCorp has been actively exploring developing this solar farm as well as a hyperscale data centre at the site.

If scale, speed to market, sustainability, low latency, high-performance computing are key priorities for data centre enterprise, Telco, OTT and hyperscaler tenants, then data centre parks or clusters are a good option.

Data centre parks have many features that make them attractive to tenants which, in turn, make them desirable investment locations. The infrastructure and government incentives built into the data centre park business model additionally make them an attractive location choice for investors and operators.

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