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Data centre boom: South Africa rises as a global hub
In a significant development for the country’s digital infrastructure, South Africa has emerged as an increasingly attractive destination for data centre operators. Calvin Crick, the managing director of transaction services at Cushman & Wakefield | BROLL, has confirmed the nation’s growing appeal and its ability to attract data centres to its property market.
Cushman & Wakefield, a leading real estate services company, has been actively involved in advising numerous operators on successful transactions in South Africa, reaffirming the findings of their recently published Global Data Centre Market Comparison report.
The report reveals a surge in demand from hyperscale tenants, who are expanding their operations in secondary and emerging markets, with Africa being a prominent focus in their growth strategy.
Crick stated, “South Africa continues to attract data centres due to its favourable market conditions. We have successfully advised many operators on transactions in the country, showcasing the growing appeal of South Africa’s property market for this sector.”
Among the African markets, Cape Town has secured its position as one of the top ten global markets to watch for future data centre locations. The city’s strategic coastal location and robust infrastructure have attracted attention from industry players.
Commenting on this, Crick said, “Cape Town’s competitiveness as a data centre location is on the rise. Its favourable geographical position and strong infrastructure make it an attractive choice for data centre operators looking to expand.”
Crick further emphasised the importance of Johannesburg in the data centre market, stating, “Johannesburg remains South Africa’s leader in data centre 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 centre operations.”
Crick anticipates that the forthcoming launch of the 2Africa subsea cable in 2023 will revolutionise South Africa’s fibre connectivity landscape. Highlighting the significance of this development, he said, “The 2Africa subsea cable will ramp up connectivity with three landings in South Africa, significantly increasing the country’s appeal as a data centre location. This enhanced connectivity will unlock new opportunities for data centre operators in South Africa.”
Johannesburg’s competitive advantage extends beyond connectivity. The city boasts the third most favourable land prices globally, offering an attractive proposition for data centre construction.
Crick commented, “Land suitable for data centres in Johannesburg and Cape Town is considered affordable when compared to land in established European and US markets. This cost advantage reduces barriers to entry and attracts new players to the market.”
The report also evaluates other key criteria for data centre locations, including power prices and environmental risks. He highlighted the importance of environmental considerations, stating, “Data centres need to be located in areas safe from natural disasters to ensure uninterrupted operations. While Johannesburg’s stringent environmental criteria limit the availability of sites, early entrants are rewarded with prime locations.”
Crick further emphasised the significance of sustainability in data centre operations, stating, “Hyperscale operators are realising that their real estate strategies play a pivotal role in meeting their environmental commitments. We are working closely with like-minded property services companies to ensure that data centres achieve both their business objectives and environmental goals.”
As South Africa continues to attract data centres, 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 centre landscape.
