Japan ViewPoint - Data Centres - "Big Data, Bigger Yields"

VIEWPOINT VIEWPOINT NOVEMBER 2017

Japan’s Data Centers Represent Opportunity for Savvy Investors

V I E W P O I N T JAPAN DATA CENTRE

Hiroshi Okubo CBRE Research, Executive Director Fuminori Asaki CBRE Research, Associate Director

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1. D A T A C E NT R E S – A N AR E A O F G R O W ING INT E R E S T AMO NG R E A L E S T A T E INVE S T O R S

Figure 1：Expected NOI yields by asset type

Source : CBRE, November 2017.

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Figure 2：Expected NOI yields for data centres by region 7.0 6.5 6.0 5.5

5.0

Source : CBRE

4.5 Central Tokyo

Greater Tokyo

Central Osaka

Greater Osaka

Other areas

Source : CBRE, November 2017.

2. D A T A C E NT R E S HO R T A G E

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3. KE Y C R IT E R IA W HE N S E LE C T ING A S IT E F O R D AT A C E NT R E D E VE LO PME NT 3. 1. KE Y E L E ME NT S A R E E LE C T R IC PO W E R , C O MMU NIC AT IO NS AND NA T U R A L D IS A S T E R S

Figure 3：Key criteria when selecting a data centre site

Source : CBRE, November 2017.

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3- 2. E L E C T R IC PO W E R A VA ILA B ILIT Y

Figure 4 : Relationship between contracted electric power and voltage (case of TEPCO)

REQUIRED ELECTRIC POWER / VOLTAGE

Contract Voltage (V) 140,000 140,000 Super High Voltage

60,000 60,000 20,000 20,000

High Voltage

6,000 6,000

Low Voltage

200 200

0

10

20

30

40

50

60

Contract Power (MW)

Source : CBRE, November 2017.

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3- 3. C O M M U NIC A T IO NS E NVIR O NM E N T

Figure 5 : Physical distance is important

Source : CBRE, November 2017.

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3. 4. NA T U R A L D IS A S T E R R IS K

3. 5. S U MMA R Y : W HA T IS A G O O D LO C AT IO N F O R A D AT A C E NT R E ?

Figure 6 : Regions of particular interest to investors as data centre locations First priority

Second priority

Central Tokyo (15km from Tokyo st.)

Greater Tokyo (50km from Tokyo st.)

Central Osaka (15km from Osaka st.)

Greater Osaka (50km from Osaka st.)

Other areas 0%

10%

20%

30%

40%

50%

60%

70%

80%

Source : CBRE, November 2017.

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4. C U R R E NT IS S U E S W IT H R E G AR D T O S E C U R ING LAND F O R D AT A C E NT R E S 4. 1. T IME T A KE N T O S E C U R E PO W E R S U PPLY IS A B O T T LE NE C K

4. 2. D A T A C E NT R E INVE S T ME NT S T R AT E G Y

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5. A PPE ND IX 5. 1. T HE INVE S T ME NT F O R MAT F O R T HE R E AL E S T A T E INVE S T O R

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Figure 7 : The investment format for the real estate investor

Source : CBRE, November 2017.

5. 2. D A T A C E NT R E - S PE C IF IC IND IC AT O R S

Figure 8 : Relationship between area/number of racks and electric power Explanation Server room Rack IT Load PUE (Power Usage Effectiveness)

Specs for general data centres

Room for computers

40-50% of gross floor area

Racks upon which computers are installed

About 3 sq. m. per rack

Power supply to computer excluding power for other facilities such as air-conditioning and lighting

6-8kVA per rack on average

Ratio of how efficiently a data centre uses energy (where 1.0 is the most effective) PUE=[Total Facility Energy]/[IT Load Energy]

Effective value average: 1.5-2.0

Source : CBRE, November 2017.

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CBRE GLOBAL RESEARCH

JAPAN RESEARCH

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