Local industrial property firm opens first data centre

Source: Business Times, 8 October 2015

A HOMEGROWN industrial property developer is investing more than S$100 million into its new data centre venture, with the hope that it will ultimately account for more than half of the company’s revenue.

The 208,000 square foot, five-storey Kingsland Data Centre, which officially opened its doors on Wednesday, also marked Kingsland Development’s first foray into the technology sector. The company already has experience in industrial warehousing and hospitality developments in Singapore, Malaysia and Cambodia.

“I aim to have the data centre bring in at least 50 per cent of Kingsland’s revenue in the future,” said the chairman and managing director of the Kingsland Group, Sok Hang Chaw, without stipulating a timeline. “We see further demand from the industry for more space for data centres.”

In a report published in July that surveyed the supply of data centres here, Singapore’s co-location market generated US$963 million in revenue in 2014. Co-location refers to availability of equipment, space and bandwidth for rental to retail customers.

This figure is projected to grow at a two-year CAGR (compound annual growth rate) of 15 per cent to more than US$1.2 million in 2016.

The same survey, conducted by Canada-based independent research and consulting firm Structure Research, noted that there were 44 unique co-location data centres here, totalling around two million square feet of data centre capacity.

The data centre scene is still expanding. Equinix, the second largest data centre provider here, opened its third centre here.

Other noteworthy data centre providers like MediaCorp’s 1-Net and Digital Realty Trust are also making expansion plans.

Kingsland is taking a slightly different tack. In touting its new facility as a multi-tier wholesale data centre, the company believes it can cater to the needs of more customers.

“Tiers” refer to the level of functionality, security and redundancy offered to systems housed in data centres based on set guidelines; the higher the tier, the better the services offered.

Chief operating officer of Kingsland Development Asher Ling explained that most data centres here focus on only one tier, while Kingsland hopes to attract clients with diverse range of need.

As the manufacturing and hospitality sectors approach saturation with fewer opportunities for smaller players, Mr Sok is hoping to carve out new terrain for Kingsland in the data centre market. Already, Kingsland is getting queries from banks, information technology firms and telecommunications companies for its data centre services.

“Data centres will be Kingsland’s new growth area,” said Mr Sok.