2021 China Data Center Report From Savills

The following is the 2021 China Data Center Report From Savills recommended by recordtrend.com. And this article belongs to the classification: cloud computing, research report.

With the innovation of information technology and the prosperity of e-commerce, China’s Internet Data Center (IDC) market has entered a period of rapid development. According to the data of synergy research, China has become the second largest IDC market in the world, accounting for 10% of the global market share; The United States ranks first, accounting for 39%.

The surge in online demand brought by COVID-19 in 2020 has boosted the growth of the global data center. China’s IDC market ushered in a period of rapid development. The market scale increased by 43.3% year-on-year, reaching the highest growth rate since 2012, with an amount of RMB 223.87 billion.

In China’s IDC market, China Telecom, China Unicom and China Mobile still dominate, accounting for more than half of the overall scale. Due to the comparable advantages of operators’ neutral services, third-party IDC service providers are becoming more active. With the accumulation of large customer resources and the continuous enhancement of capital strength, the market share of third-party IDC service providers is on the rise.

Low carbon road of China IDC market

take a heavy burden and embark on a long road

For the data center, whether it is site selection or operation and maintenance, power guarantee has always been the top priority. In 2020, data centers account for about 2.7% of China’s electricity consumption. With the continuous growth of market volume and demand, this proportion is expected to rise.

In terms of data center operating costs (OPEX), power and depreciation costs account for more than 70% of operating expenses. Among them, the power cost accounts for 57%, and the main power consumption comes from it equipment (50%), cooling system (35%), power distribution, lighting and other consumption. Power related indicators, such as pue (power use efficiency), electricity price and power consumption index, are important considerations in site selection.

The three-year action plan for the development of new data centers (2021-2023) points out that by the end of 2023, the average annual growth rate of the rack scale of national data centers will be maintained at about 20%, and the average utilization rate will strive to increase to more than 60%. The pue of new large-scale and above data centers shall be reduced to less than 1.3, and the pue in severe cold and cold areas shall be reduced to less than 1.25. The data center needs enough land and power supply, which many steel mills seeking transformation have. At present, many steel mills have been transformed into data center projects / companies, such as Hangzhou Iron and Steel Co., Ltd. and Jiangsu Shagang Co., Ltd.

Domestic IDC rent & Utilization

Double rise in first tier cities

Cabinet rents vary greatly due to regional and supply and demand dynamics. In the first half of 2021, the average rent of first tier cities is about 1500 yuan per kilowatt per month, while that of non first tier cities is about 400-500 yuan per kilowatt per month. The rate will also vary slightly according to the size of tenants: Wholesale tenants are usually 10-20% lower than retail tenants, and super large data center tenants are 30-40% lower than retail tenants.

In 2019, the average rack utilization rate of national data centers will increase to 53.2%. Among them, the overall utilization rate of super large data centers in the Midwest is low, about 30-50%. The utilization rate of large or medium-sized data centers in first tier cities and surrounding cities is high, about 70-80%, and the utilization rate of stable data centers can usually reach 80-100%.

REITs x data center

Excellent performance in overseas markets

On April 30, 2020, the development and Reform Commission of China Securities Regulatory Commission jointly issued the notice on promoting the pilot work of real estate investment trusts (REITs) in infrastructure industry. In May 2021, the first nine REITs were launched in, covering infrastructure, warehousing and other fields.

IDC industry is one of the asset categories currently supported by REITs in China. REITs can help IDC enterprises revitalize stock, broaden financing channels and improve expansion efficiency. Especially for leading enterprises, their strong end-user stickiness and stable rental income make the market optimistic about the development potential of IDC REITs products.

In terms of the U.S. real estate trust market, by the end of 2020, the REITs of assets with data center as the bottom ranked fifth, and its market value exceeded that of office and complex REITs.

China IDC market

Four future trends

Adjacent line

Relatively low land and power costs and proximity to population centers with large demand make cities adjacent to first tier cities attractive to the construction of new data centers.

Upstream and downstream expansion

IDC service providers in China are expanding from hosting services to upstream and downstream. While some service providers are involved in value-added services, others are trying to cooperate with foreign cloud service companies (such as AWS) to establish business in China.

Cloud computing and edge computing

The rise of cloud computing is constantly attracting some customers to turn to cloud services. IDC China predicts that by 2024, China’s public cloud market will account for more than 10.5% of the global market share. In addition, the promotion of edge computing also puts forward new requirements for the network layout of data center.

Green sustainability

In order to guide the green and energy-saving development of the data center, it is expected that the control of energy consumption indicators will be more strict. IDC service providers are actively reducing energy consumption by adopting new technologies such as central management system and advanced design and construction technologies.

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