Report Examines Data Centers In South And Southeast Asia: A Balance Between Risk And Reward
Data centers form a rising asset class in South and Southeast Asia. Rapid digital transformation, accelerated by the pandemic, is fueling a surge in demand for data processing and data storage capacity among consumers and enterprises alike.
That said, data center investments are capital intensive and take time to generate income. This could pressure the balance sheets of providers. Data center providers could also face higher execution risks as they expand into less mature markets in the region.
That’s according to a report published by S&P Global Ratings today, titled, “Data Centers In South And Southeast Asia: Balancing Risk And Reward.”
Key Takeaways:
| • | Data center capacity to grow at a compound annual growth rate of between 10% and 25% in South and Southeast Asia (except Singapore) over the next few years, spurring investment and funding opportunities. |
| • | Investing in data centers will allow providers such as telcos and real estate companies to diversify their revenue and assets. |
| • | There are risks, however, given the capital intensity of the business. Local partnerships and prudent expansion will be key to containing emerging-market risk including evolving regulation, the availability of stable interconnectivity, and power supply infrastructure. |
This report does not constitute a rating action.
The report is available to subscribers of RatingsDirect at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to [email protected]. Ratings information can also be found on S&P Global Ratings’ public website by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
RatingsDirect_DataCentersInSouthAndSoutheastAsiaBalancingRiskAndReward_56000520_Sep-11-2023
