South Luzon a hub for growing data centers in Philippines

Global real estate consultant JLL maintains that the data center market has significant activity south of Metro Manila. In the first quarter of 2022, JLL Philippines announced that data centers are expected to explore sites outside Metro Manila in 2022.

The forecast now rings true, with the following data centers existing or upcoming in South Luzon:

• Existing: Globe’s CAV1 in Cavite, TIMCORP’s Carmona site in Cavite, NARRA1 (Digital Edge) in Laguna

• Upcoming: YCO Cloud One (YCO) in Batangas, Vitro Sta Rosa (ePLDT) in Laguna, Flow Digital (FLOW) in Laguna, Evolution DC (Megawide + Evolution DC) in Cavite

“The heightened need for strong data infrastructure to support the country’s data consumption serves as the backbone for the data center demand,” says Janlo de los Reyes, JLL Philippines’ Head of Research and Strategic Consulting.

For context, the Philippines’ daily time spent using the internet is 9 hours and 14 minutes, which is much higher compared to the global average of 6 hours and 37 minutes.

Access to utilities

South Luzon historically has been the industrial spine of the country, with this area having the Philippines’ largest industrial parks. As such, critical infrastructure is present and already accessible. “Access to power is critical since data centers need strong and redundant power supply to operate with little to no downtime. Additionally, water supply and sewage are also necessary for data centers’ cooling systems,” says Carl Dizon, JLL Philippines’ Capital Markets Senior Analyst working on data centers.

Economical land prices 

Land prices in South Luzon also tend to be more economically viable than in Metro Manila. Commercial and residential land uses typically command higher land prices. The urbanization of Metro Manila pushes land prices higher, driving industrial zones out of the capital. “Compared to Metro Manila, cities and municipalities in South Luzon are still under development where land values are still financially viable for industrial uses—including data center operations,” says Dizon.

Finding a safe zone

Flooding and fault lines are geographic risks commonly considered by data center operators when finding a location. In South Luzon, volcanic activity is an added concern, as Taal volcano is located there.

However, JLL is able to determine which areas are best suited for data centers through JLL’s proprietary mapping tool. Dizon says that “through MapIT, we can conduct high-level due diligence on geohazards and access to critical infrastructure.”