YCO Cloud Centers will break ground next month on the first phase of a 32 megawatt data centre campus south of Manila after working with JLL to plot a new facility tailored to the needs of the country’s emerging hyperscale market, the data center startup’s chief executive said in online forum together with one of the property consultancy’s top advisors on digital infrastructure.
“Obviously, the Philippines is riding a lot of the regional and global trends, and very specifically to the Philippines, as I think a lot of people are already aware, we are one of the most digitally connected populations in the entire world,” YCO Cloud Centers chief executive Nik de Ynchausti said in the opening session of the Mingtiandi APAC Data Centre Forum 2022. He added that, “Filipinos on average spend about 10 hours (daily) on the Internet. And just in terms of their cell phone use it’s over 5 and a half hours.”
With several new Philippine data centre ventures having been announced in recent months, Chris Street, managing director for Asia Pacific data centres at JLL said the market is just getting started. “At a macro level, the market can absorb that supply quite a bit because the demand is so high,” Street said. He added that, “Data centers here are still at a stage where it’s not really a concern to be over supplied.”
Appearing at the event, which was sponsored by Yardi, Street and de Ynchausti, who founded the Philippine digital infrastructure provider, agreed that, with major cloud service providers like Google and Amazon ramping up their operations in the country at the same time that the government pushes to keep sensitive data within the country, the country is ready for expansion of its hyperscale capacity.
In the video program, which was sponsored by Yard, de Ynchausti explained that YCO’s data centre campus in Batangas province south of the capital city will provide up to 32 megawatts of IT capacity for hyperscale clients in a nation where there are more Facebook accounts than actual people.
Construction on the 12MW initial phase of YCO’s Batangas project will commence next month with a goal of being operational within next year, and will be followed by the 20 megawatt second phase “over a couple of years,” de Ynchausti said.
“They (JLL) were able to refine what type of product we were going to bring to the table which is hyperscale and wholesale-focused because that’s really the emergent need in the country and we felt it was the best segment to go into,” he said. “We thought that 12 megawatts, while a little small… seems to be an appropriate size for a market as young as the Philippines.”
The owner-operator firm, a joint venture between local family office JJYnchausti Ventures and US-based CloudCenters, plans to pour $500 million into the country’s digital infrastructure space over the next three years, starting with the Batangas project, according to local news reports
De Ynchausti said Filipinos’ heavy use of Internet and social media platforms as well as the popularity of video streaming services from providers like Netflix and Amazon Prime Video are driving the need to develop more server hosting facilities in the country.
Similar to its Southeast Asian neighbours Singapore and Indonesia, the Philippine government is also planning to migrate its processes to locally-based cloud facilities to improve service and enhance data security – a move that YCO believes will further boost demand for rackspace.
“I know that there are a lot of cloud providers that are certainly in the Philippines because of that transition. As we’ve seen in other countries, it is going to be tremendous,” de Ynchausti said. “We are consumers of data, we are generators of data and it’s going to keep growing in our country.”
Data centre investments ramped up in Asia Pacific over the past year amid growing interest from institutional investors like Equinix and logistics specialist ESR, but JLL’s Street believes that the market remains in need of more capacity.
“I think the overall (APAC) market still has a lot of legs and a lot of runway to go,” He told MTD TV. “Within the Asia Pacific region, we are still completely underutilized and undersupplied in terms of the long term aspects of digital infrastructure.”
He said the volume of development in the region in terms of megawatts-per-population remains low compared to more mature markets like North America and Western Europe.
Political risks in Hong Kong and the 2019 moratorium in Singapore have also driven interest in alternative markets, with Jakarta having seen a burst of new data centre developments in recent years, which Street sees spreading to Manila and other Southeast Asian centres. He added that the rise of regulations requiring that data related to local citizens remain onshore for privacy protection are also helping to boost demand.
In the Philippines, which saw major players announcing at least 100 megawatts of new developments over the past year, Street said the incoming new supply will still be absorbed by the huge demand for IT capacity.
An influx of regional and global data centre operators into the Philippines also presents potential partnership opportunities for local firms, said de Ynchausti.
Singapore-based firms have contributed to the latest wave of data centre ventures in the Philippines operators including Digital Edge’s planned 10 megawatt facility in Laguna and a 72 megawatt hyperscale campus that SpaceDC aims to build in Rizal.
In March, Singapore’s ST Telemedia Global Data Centres and Philippine conglomerate Ayala teamed up to form a $350 million data centre JV while Hong Kong-based investment firm PAG announced a separate JV with Ayala’s property arm two months later.