On the doorstep to China and East Asia, South Korea is a connection point for both regional and global companies. Coupled with an unparalleled technological infrastructure, you can see why South Korea, holds appeal for companies seeking a home for their data centres.

Despite experiencing rapid growth in the 2000’s, the South Korean data centre market has largely catered to local conglomerates and carriers and is not fully equipped to serve the needs of international MNC’s. 

While it is a pioneer in information, communications technology and home to a tech savvy population, language and cultural barriers may impede MNC expansion – for example, there is a lack of 24-hour English operation services.

But, we are now approaching the 2020’s and IT firms, financial institutions and telecoms requirements are overflowing with data. They need data centres and South Korea needs to meet this demand. 

Due to South Korea’s tech-hungry domestic market, and the ‘stepping stone’ it can provide to China, the U.S. and the rest of Asia, we expect to see a spike in data centre demand here from cloud services and mobile technologies providers.  International players who are looking to enter will likely join forces with local partners to better navigate cultural and regulatory complexities.

Seoul remains the preferred location for data centres in South Korea. Equipped with stable infrastructure and a strong IT talent pool from top universities, its proximity to corporate headquarters serves as a key advantage.  However, entry into Seoul does not come without its challenges.  Greenfield sites are rare, with Incheon and Gyeonggi rising as alternative locations close to Seoul. Further, brownfield sites are available, but these are limited and will need to undergo redevelopment or conversion. 

In recent times, we’ve also seen growing interest in the metropolitan coastal city of Busan, which is home to the country’s highest number of cable landing stations and is the nearest South Korean city to Japan. 

With the growing footprint of international cloud operators and colocation providers in what has largely been a domestic market, the insular nature of this market is poised to change.

Source: Charmaine Lee, CBRE  

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