South African hyperescalator hotspots

Cushman & Wakefield | BROLL Marketing Services Managing Director Calvin Crick confirmed that South Africa continues to attract data centers to its property market. The real estate services company has successfully advised many operators on recent transactions in SA.

Calvin Creek

This supports the findings published in Cushman & Wakefield’s Global Data Center Market Comparison, which reports that high-volume tenants will continue to expand across regions, with particular interest in secondary and emerging markets, and have made major announcements, including Africa, in 2022. The study analyzed more than 1,600 data centers in 63 global markets, including Johannesburg, Lagos and Nairobi.

Cape Town is among the report’s top 10 global markets to watch for future data center locations, alongside smaller coastal cities such as Auckland and Patagonia.

As Cape Town’s competitiveness grows, Creek notes that Johannesburg is South Africa’s leader in data center demand.

The report confirms this: Johannesburg has been listed in four editions for the first time for cloud provisioning markets – a weighted criterion for data centers with market size and fiber connectivity.

Joburg is one of 34 global markets where all three of the world’s largest cloud services are available – Amazon Web Services, Microsoft Azure and Google Cloud. It is the only African city to make this claim in the report.

Creek predicts that the 2023 Transformation 2 Africa Subsea Cable will be a game-changer for South Africa’s fiber connectivity. It will span 45,000 kilometers connecting Europe, Asia and Africa and provide up to 180Tbps of capacity – more than the total capacity. All submarine cables serving Africa today. China Mobile, MTN, Meta Platform, Orange, Center 3, Telecom Egypt, Vodafone and West Indian Ocean Cable Company are leading the project.

“The 2 Africa submarine cable will increase connectivity to three ports in South Africa, which will significantly increase the country’s position as a data center.” Crick says.

Moreover, Johannesburg ranks third in the world for the best land prices. Although the cost of land is a small fraction of the total cost of building a data center, affordable land reduces entry barriers.

“Suitable land for data centers in Johannesburg and Cape Town is considered affordable compared to established European and American markets.” Crick says.

Other low weight requirements are energy cost and environmental risk. Floods, earthquakes, hurricanes, and tornadoes are all considered environmental hazards. The need to find data centers in areas free from natural and other disasters is especially important to save time if other sectors of the economy are disrupted.

Nairobi and Lagos are ranked in the top 10 for markets that present the lowest environmental risk.

Crick said strict environmental criteria for data center locations — including flood plains, wetlands, flyways, residential areas and more — would limit the availability of sites in Johannesburg but reward early entrants in prime locations.

It also highlights South Africa’s power problems as there are alternative energy sources that do not preclude hyperscalers, and data center development has a multi-year development schedule.

Nairobi is the only African city to be cited under the medium weight criteria (incentives, taxes, political stability, job vacancies, development pipeline, sustainability and smart cities).

Given the commitment of a large number of tenants to reduce their carbon footprints, building in renewable energy – such as wind, solar or hydropower – is critical for data center locations.

“As a high-tech and multi-layered asset class, data centers have many opportunities to reduce their carbon footprint. Businesses of all sectors, hyperscalers, can rapidly adapt their real estate strategies to meet their environmental commitments and partner with asset management companies that appreciate the critical role of climate impact.” They are realizing. Emphasize the creek.

Carbon reduction initiatives include renewable building materials, immersion refrigeration, AI-assisted workload management, and more, such as using waste heat to heat nearby homes.

Download the full Cushman & Wakefield Global Data Center Market Comparison here – https://catchwords.prowly.com/243279-south-africas-hotspots-for-hyperscalers.