South Africa's Ascendance as a Global Data Center Hub: A Booming Era for Data Centers
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Loading... - Sameera Reine
- 07 Jun 2023
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In a momentous development for the digital infrastructure of the country, South Africa has emerged as an increasingly alluring destination for data center operators. Cushman & Wakefield, a renowned real estate services company, has actively advised numerous operators on successful transactions in South Africa, affirming the findings of their recently published Global Data Center Market Comparison report.
According to the report, there has been a surge in demand from hyperscale tenants who are expanding their operations in secondary and emerging markets, with a prominent focus on Africa as part of their growth strategy. Crick, a representative from Cushman & Wakefield, stated that South Africa's favorable market conditions continue to attract data centers. The company has successfully guided many operators in transactions within the country, demonstrating the increasing appeal of South Africa's property market for this sector.
Among the African markets, Cape Town has solidified its position as one of the top ten global markets to watch for future data center locations. The city's strategic coastal location and robust infrastructure have captured the attention of industry players. Crick commented on this development, saying that Cape Town's competitiveness as a data center location is on the rise. Its advantageous geographical position and strong infrastructure make it an attractive choice for data center operators seeking expansion.
Furthermore, Crick highlighted the significance of Johannesburg in the data center market, stating that it remains South Africa's leader in data center demand. The city offers excellent connectivity, a robust market size, and is home to major hyperscale service providers, making it a prime location for data center operations.
Looking ahead, Crick anticipates that the launch of the 2Africa subsea cable in 2023 will revolutionize South Africa's fiber connectivity landscape. He emphasized the importance of this development, stating that the 2Africa subsea cable will significantly increase the country's appeal as a data center location with three landings in South Africa. This enhanced connectivity will unlock new opportunities for data center operators in the country.
In addition to connectivity, Johannesburg boasts the third most favorable land prices globally, providing an attractive proposition for data center construction. Crick mentioned that land suitable for data centers in Johannesburg and Cape Town is considered affordable compared to established European and US markets. This cost advantage reduces barriers to entry and attracts new players to the market.
The report also evaluates other crucial criteria for data center locations, including power prices and environmental risks. Crick stressed the importance of environmental considerations, stating that data centers should be located in areas safe from natural disasters to ensure uninterrupted operations. Although Johannesburg's stringent environmental criteria limit the availability of sites, early entrants are rewarded with prime locations.
Furthermore, Crick emphasized the significance of sustainability in data center operations, noting that hyperscale operators recognize the pivotal role their real estate strategies play in meeting their environmental commitments. Cushman & Wakefield works closely with like-minded property services companies to ensure that data centers achieve both their business objectives and environmental goals.
As South Africa continues to attract data centers, it opens up significant economic opportunities and technological advancements for the country. The growth of this sector not only strengthens the nation's digital infrastructure but also positions South Africa as a key player in the global data center landscape.
