📊 📊 FROM THE REGIONAL MORNING NOTES (SINGAPORE, 31 Jan 2025)
Data Centre REITs – Deep Dive Into DeepSeek
• DeepSeek showcased the rapid pace of innovation in AI.
• Both US and Chinese AI players could utilise the techniques exploited by DeepSeek to reduce the cost to train new AI models, which could spur pervasive adoption of AI.
• Demand for data centres for AI training and AI inference would continue to rise.
ACTION
• Singapore remains the preeminent hub in Southeast Asia. Singapore is the preferred data centre hub, being the dominant financial hub within Asia. It is also a connectivity hub linking Southeast Asia to the global network through its 26 subsea cables and three landing sites. It has a well-educated workforce, excellent infrastructure and political stability.
• Moratorium a blessing in disguise. Singapore is the most power-constrained data centre market in the world with an extremely tight vacancy rate of 1.0%. We attribute the shortage to the government’s strict adherence to climate change commitments and the resultant three-year moratorium on building of new data centres in 2019-22. The moratorium was only lifted with the Infocomm Media Development Authority (IMDA) awarding four data centre operators, namely AirTrunk-ByteDance Consortium, Equinix, GDS and Microsoft, with 80MW in capacity in Jul 23. Data centres in Singapore weren’t able to cater to demand for AI training over the past two years due to the acute shortage of capacity.
• Singapore staying ahead of competition in terms of connectivity. Singapore targets investments of at least S$10b to double its capacity for international subsea cables and landing sites over the next decade to support the widespread usage of new AI applications. The domestic infrastructure will be upgraded to provide broadband speed of 10Gbps over the next five years. The government is working with the private sector and research institutions to scale the usage of autonomous systems using new technology, e.g. low-earth orbit satellite.
• TRADING IDEAS #1:
KDCREIT (Target: S$2.53) as SGP7 and SGP8 start contributing in 1Q25.
• TRADING IDEAS #2:
DCREIT (Target: US$0.93) and MINT (Target: S$2.89) for exposure to the US market.
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#DailyRMM
Data Centre REITs – Deep Dive Into DeepSeek
• DeepSeek showcased the rapid pace of innovation in AI.
• Both US and Chinese AI players could utilise the techniques exploited by DeepSeek to reduce the cost to train new AI models, which could spur pervasive adoption of AI.
• Demand for data centres for AI training and AI inference would continue to rise.
ACTION
• Singapore remains the preeminent hub in Southeast Asia. Singapore is the preferred data centre hub, being the dominant financial hub within Asia. It is also a connectivity hub linking Southeast Asia to the global network through its 26 subsea cables and three landing sites. It has a well-educated workforce, excellent infrastructure and political stability.
• Moratorium a blessing in disguise. Singapore is the most power-constrained data centre market in the world with an extremely tight vacancy rate of 1.0%. We attribute the shortage to the government’s strict adherence to climate change commitments and the resultant three-year moratorium on building of new data centres in 2019-22. The moratorium was only lifted with the Infocomm Media Development Authority (IMDA) awarding four data centre operators, namely AirTrunk-ByteDance Consortium, Equinix, GDS and Microsoft, with 80MW in capacity in Jul 23. Data centres in Singapore weren’t able to cater to demand for AI training over the past two years due to the acute shortage of capacity.
• Singapore staying ahead of competition in terms of connectivity. Singapore targets investments of at least S$10b to double its capacity for international subsea cables and landing sites over the next decade to support the widespread usage of new AI applications. The domestic infrastructure will be upgraded to provide broadband speed of 10Gbps over the next five years. The government is working with the private sector and research institutions to scale the usage of autonomous systems using new technology, e.g. low-earth orbit satellite.
• TRADING IDEAS #1:
KDCREIT (Target: S$2.53) as SGP7 and SGP8 start contributing in 1Q25.
• TRADING IDEAS #2:
DCREIT (Target: US$0.93) and MINT (Target: S$2.89) for exposure to the US market.
____
Login to www.utrade.com.my and get the complete Retail Market Monitor Singapore plus other regional reports.
#UOBKayHian
#DailyRMM