OVERVIEW

Demand for data centers in Korea continues to grow driven by the surge in data consumption. With vacancy approaching zero for centers in the Seoul Metropolitan Area, new market players such as institutional investors, asset managers, and construction companies have entered the market.

Growth of data traffic is accelerating with the adoption of new technologies such as artificial intelligence, big data, and cloud computing, generating unprecedented opportunities for data centers.

Traditionally, the dominant form of data center in Korea has been enterprise data centers, which are owner-occupied by private corporations and the public sector, representing 72% of the total at the end of 2020. Only a few are operated by major telecommunications companies as Colocation Data Centers (28% of the total), which are centers leased to end-users for commercial purposes.

However, robust growth in data consumption has led more corporations in the IT and fi nance industries to pursue enterprise data center development.

The increasing number of global cloud service providers in Korea has also impacted market dynamics. There are numerous projects under development or leased to the world’s top data center operators, such as Equinix and Digital Realty Trust, providing cloud infrastructure for global cloud service providers (CSP) including AWS, Microsoft and Google.

Recently, institutional investors seeking to capitalize on exploding market growth have become active in new colocation data center developments. The market is becoming more segmented now with interest from institutional investors, asset managers, and construction companies.