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Data centre pilot to set higher efficiency standards, give operators longer leases
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Yong Jun
862 words
21 July 2022
Business Times Singapore
STBT
English
© 2022 SPH Media Limited
THE Economic Development Board (EDB) and Infocomm Media Development Authority (IMDA) have announced that they have launched a pilot data centre call-for-application exercise, with criteria aimed at ensuring the "calibrated and sustainable growth" of data centres in Singapore.
The Business Times (BT) understands that data centre operators will be able to submit proposals for up to 60MW of data centre capacity under the exercise. The pilot exercise had originally planned to split a total of 60MW of data centre capacity among 3 operators.
Successful applicants in the exercise will also be awarded 30-year leases -- longer than the 20-year ones previously proposed.
Leong Yee May, the managing director of Equinix South Asia, a data centre operator, welcomed the increased capacity, given that larger data centres can benefit from economies of scale if they use advanced cooling techniques. The longer leases also give certainty that the data centre will still be operational in the long run.
"Because investments for data centres are intensive from a capital-expenditure perspective ... it's really a return on investment for us, and it gives us that security and longevity," she said.
IMDA and EDB declined to reveal the number of data centres that would be approved, although they would consider all proposals on their merits.
The data centre proposals will be evaluated on key requirements such as their usage of energy-efficient IT equipment, and their plans to bring their data centre power usage effectiveness (PUE) to 1.3 or better at 100 per cent IT load. The proposals should also plan for data centres to attain the BCA-IMDA Green Mark for New Data Centre (Platinum) standard.
PUE is a ratio that describes a data centre's energy efficiency, with a lower figure representing higher efficiency.
BT understands that the requirements were set based on the targets observed in China and other European countries, as well as on industry feedback and existing innovations to improve the energy efficiency of data centres.
The lowering of the PUE target from the 2019 version of BCA-IMDA's Green Mark for Data Centres (Platinum) standard of 1.35 to 1.3 would reduce annual energy consumption at a 10MW data centre by about 4 Gigawatt-hours. This is equivalent to the annual energy consumption of about 900 4-room flats.
Notably, Equinix's data centres have an annualised average global PUE of 1.48, down from 1.62 back in 2015.
Leong said that Equinix is considering tapping technology to improve energy efficiency, such as through the use of liquid cooling and its bespoke surface-cooling technology, which reduces its water and power consumption.
ST Telemedia Global Data Centres' head of corporate development Lionel Yeo said that the PUE of 1.3 is ambitious -- but necessary.
"This can be achieved through a combination of technology innovation, acceptance of contemporary overseas practices for data hall temperatures, and close alignment with the IT equipment energy-usage patterns," he said.
The company's newest facility, STT Loyang, has achieved a PUE of 1.3 with solutions such as high-efficiency chillers and a 2,000 cubic metre rooftop solar panel installed on-site.
Data centre proposals will also be assessed on how they decarbonise and offset the data centre's carbon-emissions footprint through the use of innovative technologies such as hydrogen or solar energy.
Ashton Soh, who heads the data centre committee in SGTech, said in May that the industry body has plans for a micro-grid in Tuas that will power about 600MW of data centres with renewable energy. SGTech, a trade association for Singapore's tech industry representing more than 1,000 member companies, is in talks with government agencies.
Applicants in the call-for-applications exercise will also be assessed on how their plans strengthen the nation's regional and international digital connectivity, as well as its position as a data centre and technology hub.
They will need to show how their proposals usher in other business activities that will bring broader economic value and outcomes through areas like research and development and product development.
A moratorium on data centres was put in place in 2019, after the government began its consultation with industry players, to enable sustainable growth for the industry. As of 2021, there were more than 70 data centres with a combined capacity of about 1,000 megawatts (MWs) in operation.
Companies looking to build new data centres or expand their existing ones will have up till Nov 21 this year to submit their proposals. The result of the exercise will be announced "early next year".
BT understands that older data centres still in operation can tap EDB's incentives and grants to improve the efficiency of their facilities. Two such schemes are the Resource Efficiency Grant for Emissions and Investment Allowance for Emissions Reduction.
SPH Media Limited
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COMPANIES & MARKETS
HOCK LOCK SIEW; CapitaLand Investment's bet on rebound of hospitality sector to pay off
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731 words
21 July 2022
Business Times Singapore
STBT
English
© 2022 SPH Media Limited
CapitaLand Investment (CLI) is banking on the resurgence of the hospitality sector, with its lodging arm The Ascott announcing this month that it is acquiring serviced apartment provider Oakwood Worldwide from Mapletree Investments for an undisclosed amount.
This will add some 15,000 units and 81 properties to Ascott's portfolio. Of those units, 8,500 are operational and will boost Ascott's recurring-fee income streams when the deal is completed in Q3 this year.
The deal also gives Ascott exposure to new markets such as Cheongju in South Korea, Zhangjiakou and Qingdao in China, Dhaka in Bangladesh, as well as Washington D.C. in the United States.
Once the acquisition is complete, Ascott's footprint will span 150,000 units across 900 properties in 39 countries -- putting it firmly on track to meet CLI's target of 160,000 units under management by 2023, if not earlier.
CGS-CIMB analyst Lock Mun Yee said in a recent report: "In the longer run, this deal could expand Ascott's network of asset owners and strategic alliances to drive growth, as more than 90 per cent of Oakwood's asset owners are new to Ascott."
Co-living is another area of focus for CLI -- a move analysts say is just as much a diversification strategy into an adjacent space as it is an attempt at claiming first-mover advantage in an emerging trend. Aside from co-living, CLI has entered into the resilient long-stay lodging segments such as student accommodation and multi-family assets.
While still in its early stages, its co-living brand, lyf, is targeting 150 properties with over 30,000 units by 2030 to grow fee income. As at April this year, Ascott had 17 lyf properties with more than 3,200 units in 9 countries under its belt. Three more properties are slated to open this year.
The big story for CLI this year, however, is likely to be the recovery in the travel industry. As more countries pivot to endemic living, revenge travel has resulted in a surge in travel demand.
CLI's lodging business is likely to emerge as a major earnings driver this year, following a turnaround in Q1 2022. Revenue per available unit (RevPAU) rose 34 per cent to S$71 from S$53 in the corresponding quarter a year ago, spearheaded by Europe and Singapore. China was an outlier, with RevPAU flat at S$68 in Q1 2022, and may continue to lag other regions in recovery after the recent flare-up in Covid cases prompted extended lockdowns in certain Chinese cities.
In Q1 2022, CLI's lodging management segment posted a 31 per cent year-on-year increase in revenue to S$55 million, while its real estate investment business and fund-management business chalked up growth of 28 per cent, to S$403 million and S$132 million, respectively. Its property management business shrank 4 per cent to S$75 million.
RHB analyst Vijay Natarajan reckons the sharp pick-up in travel this year should propel the stock. But he also flagged emerging risks in the medium term: inflationary pressures, a challenging macroeconomic outlook, and a manpower crunch.
The shortage of workers has started to hamper travel's return to pre-Covid levels; last week, for example, London's Heathrow Airport limited the daily number of departing passengers to 100,000 in the wake of protracted delays, snaking queues and baggage issues. Understaffed airlines in the US and Europe have also axed flights as they struggle to rehire workers laid off during the pandemic.
And while pent-up demand means that people are willing to splurge on higher-than-normal airfares and hotel rooms right now, Natarajan said it remains to be seen how long this can be sustained.
Still, the cabin fever is real. Travel-starved consumers continue to head to the border in droves, eager to spend savings accumulated over the last 2 years. CLI's latest bet on the hospitality sector will give it greater size and scale as the hospitality sector continues on its recovery path.
SPH Media Limited
Jul 7 2022, 05:39 PM
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