Fitch: Singapore is unlikely to attract large data centre investments, as Malaysia has drawn most of it over the past years

SINGAPORE: According to Fitch Solutions, Singapore’s bid to position itself as a leading data centre destination may be unlikely as foreign data centre investors have already “placed their bets” on neighbouring markets.

Despite Singapore’s Green Data Centre Roadmap, which aims to add 300MW of new capacity in the near term, Singapore Business Review reports that the city-state may struggle to attract significant investments, with neighbouring Malaysia drawing more attention in recent years.

Fitch Solutions praised Singapore’s sustainability-focused roadmap, considering it a pioneering move in the industry, especially after the country’s moratorium on new data centre developments.

The roadmap highlights the importance of energy efficiency and sustainability, aligning with global trends towards greener technology.

By prioritising renewable energy, advanced cooling methods, and modernised designs, Singapore aims to avoid stifling regulations that could deter investors.

With this roadmap, Fitch has revised its forecast for Singapore’s total data centre capacity to 1,400MW from the previous 876MW for additional capacity.

However, despite these efforts, many major foreign investors appear more drawn to neighbouring markets like Malaysia.

Fitch highlighted significant investments pouring into Johor and Batam, with capacities exceeding 1,800MW and 285MW, respectively.

According to Fitch: “We believe it is unlikely that the initiative will rekindle large-scale foreign investor interest in the Singaporean data centre market since neighbouring emerging markets are expecting over 2,500MW of data centre capacity in the near-term.”

In addition, Fitch raised concerns about the viability of the allocated 300MW capacity for Singapore’s data centre expansion, given the increasing demands from customers, which mostly exceed 1MW.

Singapore’s data centre market has faced challenges in recent years, largely due to a moratorium imposed in 2019. /TISG

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