Consulting firm BroadGroup believes that misjudgements of market conditions in Asia have influenced recent negative media commentary. In a written commentary for Data Centre News, BroadGroup Consulting managing director, Steve Wallage cites two Malaysian data centre operators listed in London who have both seen recent sharp stock market falls. The price declines are linked to Teliti, for delays in opening a new data centre, and CSF, with trading results being hit by some one-off factors.
“The two companies both suffer from being listed in London,” commented Steve Wallage, “and despite the TeleCityGroup listing and its outstanding performance, there appears to persist a misunderstanding of data centre markets and issues and in particular in South East Asia.”
With CSF, BroadGroup argues that the story is much more about its long-term potential, with a major build in Malaysia (CX5, approximately 200,000ft2 of net technical area and comparable with leading global facilities) is just starting to be filled. The company has expansion plans including China, Thailand and Indonesia.
The Asia region has a lack of quality third party space, particularly outside Hong Kong and Singapore, and yet has sustained economic growth, and expanded the use of 4G and Cloud. BroadGroup believes this translates into demand rising at a rate of around 16-18% a year.
Global players are keen to expand their Asian presence such as Equinix who acquired AsiaTone for USD230m and around 9x EBITDA (compared with CSF trading ~3.5x). The benefits for global players of acquisition rather than organic build includes not just local knowledge and relationships, but also time to market in gaining existing sites, and secured power and planning.
BroadGroup research covering Asia and Pacific predict growth and expansion in data centres across all markets over the next three years. The group forecasts capacity growth of 29% in South East Asian countries by the end of 2015.