JLL recently released a 2023 Global Data Centre Outlook and in it, we explore the challenges, opportunities and demand drivers that will shape the industry in the year ahead. We also explore how these dynamics are impacting the investment and development markets.

ESG is top priority for firms engaged in all industries and for data centres, addressing energy use and emissions is an imperative. Climate regulations and independent initiatives are fuelling improvements in technology and innovative ways to source power. Upon the recent lifting of the moratorium on data centre development in Singapore, developers applying to be part of phase I of the pilot programme were required to meet decarbonisation and efficiency targets, and potential projects were also evaluated on economic impact.

Due to supply chain disruptions and geopolitical tensions, data centre construction delays remain commonplace in all three regions. These issues are likely to persist throughout the remainder of this year then moderate in 2024. In an attempt to mitigate these challenges, developers need to factor in longer lead times while operators are using multi-sourcing to reduce the risk of relying on a sole supplier. Friend-shoring and nearshoring also serve to offset delays due to political tensions.