REIT ASIAPAC
Feature
DATA CENTRES TAKE OVER TOKYO
Tokyo welcomes a wave of “ new economy ” assets as the number of large-scale data centres in the area rises rapidly in recent months
The development of large-scale data centres for tech giants like Google and Amazon is progressing rapidly in the Tokyo metropolitan area , and this expansion is projected to continue until 2025 .
According to the latest issue of the Nikkei Real Estate Market Report , Tokyo is seeing an uptick in demand for hyperscale data centres .
Research company International Data Corporation Japan said the aggregate gross floor area of domestic hyperscale data centres , which was less than 400,000 square metres in 2020 , will exceed 1.2 million square metres by 2025 .
Nikkei conducted a survey on large-scale data centers completed or scheduled to be developed in the Tokyo metropolitan area during or after 2020 . The survey showed that seven out of the 11 data centres , as of September this year , are concentrated around Chiba Newtown Chuo Station on the Hokuso Line in Inzai City , Chiba Prefecture , which is in an area approximately 35 km northeast of central Tokyo .
“ Japan , which is said to be lagging behind foreign countries in terms of the spread of such services , is a promising market where the winners and losers among business operators will be decided going forward . This is unlike foreign countries where competition for market share has already been somewhat settled ,” Nikkei said .
Real estate companies and investors are also starting to turn their attention to data centres as a new asset class .
Amid uncertainty over the future of offices , retail facilities and hotels due to the Covid-19 crisis , data centers are increasingly seen as an asset with similar characteristics to residential properties . They are considered to be stable investments with predictable growth , Nikkei said .
Big Names Are Entering The Market
Giant corporations , such as Amazon , Microsoft and Google , which can afford the cost required from the procurement of sites to operating the facilities are moving rapidly into the area .
A special purpose company of Google acquired 31,185 square metres of land in the entire Kaguro-Minami 3-4 Block , Inzai City , round Chiba Newtown Chuo Station , in November 2020 .
Amazon and Microsoft are also reportedly setting up shop in the area . Nikkei , citing media reports , said that Microsoft Azure is operating a data centre in Shinonome 1-chome , Koto-ku . The facility has five floors above ground with a gross floor area of 19,045 square meters and was developed by Kona GK .
Nikkei also said that Amazon Web Services ( AWS ) may also have secured space at MFIP Inzai . The facility was developed by Mitsui Fudosan , completed in May 2020 and acquired by REIT Mitsui Fudosan Logistics Park ( MFLP ) in March 2021 .
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