LOGO

In order to realize data center investment as soon as possible, it is important to know and become familiar with the trends of data centers, which will be in increasing demand in the future.

Demand for network communications is expected to grow significantly in the future due to the spread of telework, cloud computing, and the IT revolution, etc. The latest trend is not only in terms of the ability to process huge amounts of data using HPC, etc., and high power consumption, but also in terms of further expanding perspectives.

This time, we will introduce the data center trends of 2023.
　

・Shift to hyperscale

In recent years, cloud services have been supported by HSDC (Hyperscale Data Centers) instead of conventional DC (Data Centers).

HSDC is a large-scale facility built by a company that requires a huge amount of data communication and storage. You can see many mega cloud companies such as GAFAM.

Megacloud companies demand data centers that are “suitably located”, “large scale” and “uniform quality”.

Until recently, HSDC was a facility created for mega cloud operators to install a large number of servers, but now even smaller SaaS operators such as GAFAM are starting to use it.

As HSDCs increase globally with the proliferation of cloud services, it has been predicted that the increased power consumption by data centers around the world will have a serious impact on the global environment.

However, in 2020, a joint study by Lawrence Berkeley National Laboratory and others reported that while DC processing capacity has increased about sixfold from 2010 to 2018, power consumption has increased only 6 percent overall.

The widespread use of HSDCs, which can process a large amount of data with little power consumption, has reduced the increase in overall DC power consumption.

As a result, HSDCs have high energy-saving performance and contribute to reducing the burden on the environment.
It can be said that HSDCs will become indispensable facilities in the future, when sustainability will be required.
　

・Renewable Energy

　
The decarbonization of DC can be divided into two main areas.
The first is to improve the efficiency of power use in facilities, including air conditioning and power supplies, and the second is to shift to renewable energy.

In recent years, global warming caused by CO2 emissions has become an issue, and the shift to renewable energy power is accelerating.

Although the spread of HSDCs has made it possible to somewhat curb the increase in power consumption, the power consumption itself will continue to increase.

It can be said that being a sustainable data center is a prerequisite for survival. In fact, major global DC operators have set a goal of 100% renewable energy deployment.

In Japan, Ishikari City’s zero-emission DC project is underway, taking advantage of its cold climate and proximity to a renewable energy location.

There is no doubt that operating on renewable energy will be the trend for data centers in the future.

・ Edge computer market

Edge computing refers to distributed computing in which data processing and analysis is performed on devices such as IoT terminals and servers installed nearby.

Since data is processed and analyzed at the edge without being sent to the cloud, it has the advantage of high real-time performance and low communication delays due to the distributed load.

In recent years, the evolution of the IoT and AI has driven the need for instantaneous processing of large volumes of data.

The conventional cloud inevitably increases processing lead time when handling large volumes of data, and Edge DC is the answer to this problem.

In the future, it is expected that edge computing will be further developed to avoid processing delays that can become bottlenecks in the cloud due to increased data volume.

Google, Microsoft, and others are also in the process of launching cloud edge solutions and exploring new needs.

HSDCs as well as edge computers are potential investment targets.
Please take a look at the future trends in data centers mentioned above to help you forecast future investments.

CBRE (Japan headquarters: Marunouchi, Chiyoda-ku, Tokyo) has launched a dedicated data center page (search site) on PROPERTY SEARCH, one of the largest commercial real estate portal sites in Japan operated by CBRE, as part of its “Leasing Services for Data Center Use (search site) on PROPERTY SEARCH, the largest commercial real estate portal site operated by CBRE in Japan.

Background of the search site launch

Since the COVID 19 pandemic, demand for data centers has been increasing year by year, including server room relocations due to office space reduction, establishment of BCP bases in light of disaster and geopolitical risks, and rapid growth in demand for cloud computing due to the promotion of DX.

In Japan, data traffic is expected to double in the two years to 2021 due to the expansion of digital services, and demand for data centers is expected to further increase due to the further expansion of cloud service use. On the other hand, under the government’s policy for the development of digital social infrastructure, the decentralization of data centers, which are concentrated in large cities, is being considered, as well as the obligation to make all new data centers 30% more energy-efficient by 2030 and to partially convert electricity used in data centers to renewable energy under the “Green Growth Strategy for Carbon Neutrality by 2050”. The data center industry is now entering a new phase, as the government is considering mandating that all new data centers be 30% energy-efficient by 2030 and that some data centers use renewable energy.

In order to respond to these changes in the business environment, CBRE, in cooperation with data center operators, has collected information on data center properties with the aim of providing general business companies and other data center users with a wider choice of data centers to use, and has created Japan’s first data center We have built Japan’s first data center property search site.

Search site main service contents

We provide comprehensive and integrated support for the execution of solutions to our clients’ issues, from the formulation of real estate strategies related to data centers to development, transactions, and operations.
Their main services are as follows.

– Advisory services for “real estate strategy development” for data center business
– Brokerage for purchase, sale, and lease of land for data centers
– Appraisal” of existing data centers and “consulting” reports for new data centers
– Development project management for data center construction
– Property and facility management for data center operations

The data center industry is entering a phase of further expansion. With Corona, video distribution and online shopping have grown, and the importance of data centers as social infrastructure has further increased, making data centers a target asset for real estate investment.

Globally, telecommunications carriers and IT service companies have been aggressively investing.

The data center market in Japan is expected to grow further in the future, and foreign data center operators are entering the market one after another.

In addition to the rapid pace of data center development in Japan, which is driven by the increasing amount of investment each year, we must also respond to social issues such as the government’s initiative to promote regional decentralization and carbon neutrality, and we must strategically address data center development in a holistic manner. In addition, the government is taking the lead in the development of data centers.

CBRE’s knowledge and experience in advisory, consulting, and management of facilities such as logistics, warehouses, factories, infrastructure, and data centers, combined with CBRE’s domestic and international network and solid platform, will provide a new value-added service. Expectations are high for this new value-added service.

In the past, we introduced the following three conditions for determining the location of a data center that can operate stably in Japan.
(1) elimination of communication delays and redundancy
(2) High power consumption and redundancy
(3) Measures against natural disasters
These three factors were introduced in this report.

In this issue, we will focus on what kind of locations are selected as data center sites around the world.

Data Center Location Ranking.
U.S. Overwhelmingly Popular – Northern Virginia Tops the List

Northern Virginia has once again been named the “World’s Most Attractive Data Center Locations” by real estate specialist Cushman & Wakefield in its annual ranking of the world’s most attractive data center locations.

Global Data Center Market Comparison Report Ranks U.S. Top 8 Cities.
The report ranks Internet centers according to criteria such as fiber connectivity, tax incentives, and land and power prices.
The top 10 are skewed toward the U.S., with Cushman predicting that Northern Virginia, with its current capacity of 1.7 GW, will likely reach 2 GW or more in the next two years.

It is no surprise that Northern Virginia has once again topped the overall rankings for the third year in a row.
Virginia is the largest data center market in the world and has a strong construction pipeline.
It offers excellent connectivity, attractive incentives, and low-cost power.
Vacancy rates are very low, demand is high, and operators and tenants alike are interested in expanding.
As such, the region has the potential to become the world’s first 2 gigawatt market within the next two years.

Silicon Valley and Singapore are also well known for their lack of land and power, and in the case of Singapore, they actually rank high despite the government putting the brakes on approvals to build data centers.

While high power availability is cited as an important location factor in Japan, land and power are the three lowest priorities among the 13 factors Cushman considered in its ranking.
This indicates that builders are always expected to find ways to squeeze capacity in locations that score high on the top priority of being close to the hub’s existing capacity.

Cushman’s top three factors are fiber connectivity, market size, and cloud availability.

The elements that come next are essentially optional and include sustainability, political sustainability, taxes, and incentives.
Environmental risk from natural disasters, which is considered important in Japan, is the lowest weighted factor.

Hong Kong’s very low use of renewable energy, which means that data center operators emit large amounts of greenhouse gases, moved it from outside the top 10 to sixth place in this factor.
On the other hand, Seattle and new entrant Portland tied for 10th place, both being recognized for their consideration of environmental issues, “Both are sustainability-focused cities in the Pacific Northwest of the United States.

U.S. Advantages

The data center U.S. dominance may be due to the fact that U.S. social media and cloud hyperscalers dominate the Internet.
However, this could also reflect the fact that China does not participate in the international real estate market in the same way as other countries.
Beijing and Shanghai are included on this list, but Shanghai does not top the list, despite being the fourth largest data center hub in the world at 600 MW.
The top 10 includes eight U.S. hubs, with Atlanta, Portland, and Phoenix new to the list, making up for the fall of New York (No. 9 last year). London (previously No. 7) and Amsterdam (No. 10 last year) fell out of the top 10, despite being 800 MW and 400 MW, respectively.
Outside of the U.S., Singapore, Hong Kong, and Sydney are the other three cities ranked in the top 10.
Note that 11 cities are included in the top 10 due to a tie for 10th place.

It remains to be seen how this global data center situation will affect Japan.

Sorry, this entry is only available in JA.

Sorry, this entry is only available in JA.

Sorry, this entry is only available in JA.