Data centers to explore sites outside Metro Manila in 2022 – JLL

Global real estate consultant JLL announced earlier this year that data centers are expected to explore sites outside Metro Manila in 2022. This insight comes from analysis of data on MapIT, JLL’s proprietary location intelligence service tool.

“We used JLL MapIT to conduct a high-level due diligence on geohazards and access to critical infrastructure,” says Carl Dizon, JLL Philippines’ Senior Analyst for Capital Markets. “Through MapIT, we can see that the current data centers in Metro Manila are almost within the reach of the geohazards. Most hyperscalers would have more stringent requirements about potential geohazards.”

Hyperscalers and the demand for data centers

With increased internet activity brought about by the lockdowns throughout the pandemic, businesses saw higher data usage globally. The same is true for the Philippines, where social media use has been strong and e-commerce adoption is projected to continue growing among the country’s young population, providing support to sustained increase in internet usage.

Aside from e-commerce, the Philippine government is also expected to serve as a significant demand source for data. “The government’s Cloud First policy promotes cloud computing as the preferred technology to manage and deliver government services. This represents a sizeable market for hyperscalers,” says Janlo de los Reyes, JLL Philippines Head of Research and Consultancy.

In a nutshell, the heightened need for strong data infrastructure to support the country’s data consumption serves as the backbone for the data center demand. Beginning last year, the local data center market already saw significant activity.

“JLL estimates that current total capacity in the Philippines is approximately 96-megawatts. This figure may triple in the next few years as more data center players are expected to enter and expand their footprints in the country,” says de los Reyes.

Data centers will have to explore areas outside Metro Manila to meet their large requirements

Making the right forecast

In JLL’s market overview webinar earlier in 2022, Dizon forecasted that companies intending to set up data centers with larger requirements will have to explore areas outside Metro Manila to meet their needs. “We use MapIT to advise data center operators on which areas to consider, and landowners interested in hosting data centers as a quick check if their spaces pass the basic geographic requirements,” says Dizon.

True enough, data center investments in the Philippines so far are following the trend. For instance, ePLDT is to set up a telco agnostic hyperscale data center installation in Laguna. YCO Cloud Centers, a joint venture between JJYnchausti and Cloud Center, also plans to build a 12-megawatt facility in the Light Industry and Science Park IV in the Batangas Province.

This year, Singapore-based firm SpaceDC announced its plan to invest more than USD700 million in a 72-megawatt facility—the country’s largest hyperscale data center—in Cainta, Rizal. The data center will be called MNL1 with JLL as the project manager.

For advisory and data center-related, projects: https://www.jll.com.ph/en/contact-us.

For more insights on the data center landscape in the Philippines: https://research.jllapsites.com/the-rise-of-data-centers-in-the-philippines/.

JLL has been operating in the Philippines since 1997 as a 100% wholly owned entity and currently manages about 5.3 million square meters of real estate with a workforce of over 1,200 employees. With more than two decades of local expertise working hand-in-hand with its global legacy, JLL provides to the Philippine real estate market an unparalleled synergy of services with a strong commitment to achieve real estate ambitions through future-ready approaches.