JAKARTA – JLL Indonesia, a commercial real estate management company, views data centers as a property segment that has bright prospects in Indonesia in years to come.

According to Yunus Karim, Head of Research at JLL Indonesia, data center players have started to emerge since 2018. "Previously, they were still looking for land," he explained when met at JLL Indonesia's Property Outlook and Media Briefing today (7/8).

Domestically, the data center industry is still dominated by two regions, namely Jabodetabek and Batam. Usually, industrial areas in Jakarta's satellite cities can accommodate large data centers, or hyperscale data centers.

For example, PT Puradelta Lestari Tbk (DMAS), the developer of Kota Deltamas in Bekasi, recorded a high contribution from the data center business to its marketing sales as of June 2024.

"More than 75% of pre-sales of industrial land in the first semester of 2024 are still dominated by the data center industry," said Tondy Suwanto, Director of DMAS, in his official broadcast on July 17, 2024.

Now, Karim added, data centers are starting to be built in various locations in Indonesia. The Jakarta CBD area is also said to be an alternative thanks to its location close to the fiber optic cable network.

For example, PT Bersama Digital Data Centers (BDDC), a data center provider that is currently on the rise, is recorded as having 2 data centers in the center of Jakarta, such as Daan Mogot and Cawang.

Outside of Java, Batam is the second most popular data center business destination. However, this region has strong competitors, namely Singapore and Johor, Malaysia. Riau. "So the choice is between Singapore, Johor or Batam," said Karim.

However, to increase Indonesia's competitiveness in the data center industry, we cannot rely on land and data center building developers alone.

With the data center building and location requirements being quite specific and complex, for example not prone to disasters, adequate electricity supply, and up-to-date technology, Karim believes that there must be support from the entire ecosystem involved, both fiber optic network infrastructure providers, electric power, and etc.

Despite the challenges, Karim assesses that the data center industry in Indonesia is still promising. “Because Indonesia is growing quite rapidly. In fact, when players have entered, there are still players who see Indonesia; Jakarta, in particular," he concluded. (ZH/LM)