Keppel DC REIT clocked positive rental reversion of more than 40% for a major renewal contract in Singapore in 2Q24, a reflection of strong demand and tight vacancy locally. Large colocation leases with longer WALE of 3-4 years led to the astronomical positive rental reversion.
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Singapore is the most power-constrained data centre market in the world
Singapore is the most power-constrained data centre market in the world with an extremely tight vacancy rate of 1.0%. We attribute the shortage to the government’s strict adherence to climate change commitments and the resultant 3-year moratorium on building of new data centres in 2019-22. The moratorium was only recently lifted with the Infocomm Media Development Authority (IMDA) awarding four data centre operators, namely AirTrunk-ByteDance Consortium, Equinix, GDS and Microsoft, with 80MW in capacity in Jul 23.
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Rents for retail colocation leases have surged the most due to limited supply.
Focus on high value colocation leases.
Read more at SGinvestors.io.
Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
