Hana Insight #22 Data Center Investment Guide 2020


1  In the 5G environment, a large amount of data processing/storing capability is essential, and demand for data centers is increasing



• 5G has a maximum speed of more than 20 times faster than the existing 4G and it enables various technologies via the Internet, such as autonomous driving and IIoT.

• The amount of data that needs to be generated/processed/stored is expected to increase exponentially as the Internet is used throughout our daily lives and also business activities.

• In particular, with the recent preference for edge computing, interconnection, and hybrid IT environments, companies’ demand is moving from on-premise data centers to outsourced data centers, and rental demand for data centers is expected to increase.




2  Selective investment is required in data centers that are adjacent to the city center and have long-term tenants




Continuous power supply and network infrastructure are essential, and more recently the speed and the latency for data processing have become the key elements for data centers therefore locations adjacent to city centers are preferred. Hyper-scale data center capacity in five global cities accounts for 25% of the total capacity.

• As construction and renovation costs per unit area are high, a long-term/strategic relationship with the tenant is essential, and the tenant’s ability to operate the data center is also an important factor.

• New development contract with the tenant or sale and leasebacks are the major investment types within the data center market.