July 30, 2021

4 thoughts on “Will Mapletree Industrial Trust & Keppel DC REIT Benefit from Facebook’s Transpacific Data Connection (Bifrost and Echo)?

  1. DC are energy guzzlers, consuming >10% of total electricity generated in Singapore. Because of Singapore's green committment, moratorium has been imposed on the building of new DC since 2019, although talk is that this will be lifted this year. Even lifted, chance is that not many new DC will be approved, unless the applicant is strategic to Singapore, such as the $1.3 bil, 11-storey soon to be completed Facebook DC. With future supply limited, KDC existing DC in Singapore are rare good-class-bungalow properties, price dictators for years to come, until new technology surfaces and reduce demands for land-based physical DC (such as the experimental game-changer off-shore DC for which Keppel TT has sunk $mils in R&D). For AUM expansion, KDC/MIT/Ascendas will have to look overseas.

    1. DC are energy guzzlers, consuming >10% of total electricity generated in Singapore. Because of Singapore's green committment, moratorium has been imposed on the building of new DC since 2019, although talk is that this will be lifted this year. Even lifted, chance is that not many new DC will be approved, unless the applicant is strategic to Singapore, such as the $1.3 bil, 11-storey soon to be completed Facebook DC. With future supply limited, KDC existing DC in Singapore are rare good-class-bungalow properties, price dictators for years to come, until new technology surfaces and reduce demands for land-based physical DC (such as the experimental game-changer off-shore DC for which Keppel TT has sunk $mils in R&D). For AUM expansion, KDC/MIT/Ascendas will have to look overseas.

      Hi retiree5559,

      Tks for the valuable comments, and additional info, and I agree with u. Indeed DCs likely to become rare in SG like GCB. Rents in DC will be inclined to rise if due for renewal. Lower WALE is not a bad thing in fact.

      SG and HK are of DC gateways in this region for most Western and Australasian companies. That said, the relationships with China remain a teething issues in HK, that SG may stand to benefit as companies are likely relocated DC from HK to SG.

      Considering the political situations of our neighbouring countries, guess SG will still be the best choice for DCs for many of the large IT companies.

      Indeed, growth here is limited by land, and as u can see most local DC companies are going abroad for acquisition. Unless we are going to put more in Ubin or Tekong or some SG islands….

      Still, we can probably envisage government to be innovative enough to produce lands/new or refurbished buildings for some more DCs here. Afterall, we are clearing some golf courses, didn’t we…. 

      For energy consumption problems, guess R&D in DC consumption will be able to resolve this issue. Amazon already have a low energy consumption DC.

      Another alternative solution to SG electricity consumption problem, is one that was already announced last Oct.

      “World's Largest Solar Farm in Australia Will Also Supply 20% of Singapore's Electricity”

      https://www.ecowatch.com/worlds-largest-solar-farm-singapore-australia-2648425842.html

  2. Hi Rolf, thank for sharing of knowledge on the DC & energy development in Singapore. More knowledge = better judgment in making investment decisions.

    Gained some basic knowledge of DC in the course of works some years back when Big Data was a buzz word and every government department and business wanted to get involved. Was sold on the potential of DC since.

    Invested in KDC since its IPO and continue to accumulate through the 2 rights issue and whenever there was a pull back in prices after consolidation. Currently one of my top 3 REITS holding, and one of top 10 overall. Hope our faith in the DC potential is justified.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: