Since the COVID -19 pandemic appeared, we have been forced to change our life as well as working styles. Most investors’ intentions have been focusing on residential, logistics and hospitality assets and one of the new directions is data center.
Today, I would like to spend some time to analyze the best data center location in greater Tokyo area. The criteria are as follows.
1 Secured electricity supply
2 Low hazard risk
3 Cheap rental expense
4 Access to office concentration
1 Secured electricity supply
Needless to say, the electricity supply should be secured even under disaster attacks.
The configuration of power plants can be found under TEPCO site.
https://www.tepco.co.jp/en/hd/ourbusiness/thermal/index-e.html
Most of thermal as well as water power generation plants have been in greater Tokyo marginal. In the center of Tokyo it is naturally hard to find the proper location to develop a large scale of power plants. Thus greater Tokyo surrounding area, or on the edge have been preferred to have power plants.
2 Low hazard risk
Since the great Tohoku earthquake in 2009, people have been careful in location selection. The soil condition in Western part of Tokyo is presumably much harder than that of Eastern. Regarding Tsunami, therefore, Western Tokyo looks more secured but earthquake itself, a sort of plate can be found in Western part.
This is the hazard map released by MLIT, some are JP only.
https://www.mlit.go.jp/river/bousai/olympic/en/prepare01/index.html
3 Cheap rental expense
As it takes more distance from the center of business district, the rental value gets cheap. However, depending on the access to the HQ offices, the data center should not be too far from the central. Therefore, secondary office buildings in secondary location can be used as data center.
4 Access to office concentration
The distance where staffs located in the HQ can access within one hour may be acceptable, considering the possible risk measurement. Therefore, a location within Tokyo metropolitan area looks ideal for data center operators.
Thus, the location criteria for data center is as follows;
1 Secured electricity supply
2 Low hazard risk
3 Cheap rental expense
4 Access to office concentration
However, in addition to above criteria, balance of building resilience and its energy efficiency may provide the better location for the potential data center property. This means that even though low ground height area, as long as the building demonstrates good resilience, proper distance, and reasonable rent, the property can be used as a good data center.
Therefore, as a conclusion, the primary criteria are electricity availability, natural hazard free, cheap rent, and distance to the office. However, depending on the building and location, a company can have the better data center property in a good location with cheap cost.
Further queries or doubts, please email to ytomizuka@abrilsjp.com
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