VIEWPOINTJapans Data Centers Represent Opportunity for Savvy InvestorsVIEWPOINT NOVEMBER 2017 VIEWPOINT©2017 CBRE, Inc. | 2Hiroshi OkuboCBRE Research, Executive Director Fuminori AsakiCBRE Research, Associate Director JAPAN DATA CENTRENOVEMBER 2017 CBRE ResearchVIEWPOINT1. DATA CENTRES AN AREA OF GROWING INTEREST AMONG REAL ESTATE INVESTORS©2017 CBRE, Inc. | 3JAPAN DATA CENTREFigure 1： Expected NOI yields by asset typeNOVEMBER 2017 CBRE ResearchSource : CBRE, November 2017.VIEWPOINT2. DATA CENTRE SHORTAGE©2017 CBRE, Inc. | 4JAPAN DATA CENTREFigure 2： Expected NOI yields for data centres by regionSource : CBRENOVEMBER 2017 CBRE Research4.55.05.56.06.57.0Central Tokyo Greater Tokyo Central Osaka Greater Osaka Other areasSource : CBRE, November 2017.VIEWPOINT3. KEY CRITERIA WHEN SELECTING A SITE FOR DATA CENTRE DEVELOPMENT3.1. KEY ELEMENTS ARE ELECTRIC POWER, COMMUNICATIONS AND NATURAL DISASTERS©2017 CBRE, Inc. | 5JAPAN DATA CENTREFigure 3： Key criteria when selecting a data centre siteNOVEMBER 2017 CBRE ResearchSource : CBRE, November 2017.VIEWPOINT©2017 CBRE, Inc. | 6JAPAN DATA CENTRE3-2. ELECTRIC POWER AVAILABILITYNOVEMBER 2017 CBRE ResearchFigure 4 : Relationship between contracted electric power and voltage(case of TEPCO)0 10 20 30 40 50 602006,00020,00060,000140,000Contract Power (MW)Contract Voltage (V)140,00060,00020,0006,000Super High VoltageHigh VoltageLow VoltageREQUIRED ELECTRIC POWER / VOLTAGESource : CBRE, November 2017.VIEWPOINT3-3. COMMUNICATIONS ENVIRONMENT©2017 CBRE, Inc. | 7JAPAN DATA CENTRENOVEMBER 2017 CBRE ResearchFigure 5 : Physical distance is importantSource : CBRE, November 2017.VIEWPOINT©2017 CBRE, Inc. | 8JAPAN DATA CENTRENOVEMBER 2017 CBRE ResearchVIEWPOINT3.4. NATURAL DISASTER RISK3.5. SUMMARY: WHAT IS A GOOD LOCATION FOR A DATA CENTRE?©2017 CBRE, Inc. | 9JAPAN DATA CENTRENOVEMBER 2017 CBRE ResearchFigure 6 : Regions of particular interest to investors as data centre locationsSource : CBRE, November 2017.0% 10% 20% 30% 40% 50% 60% 70% 80%Central Tokyo (15km from Tokyo st.)Greater Tokyo (50km from Tokyo st.)Central Osaka (15km from Osaka st.)Greater Osaka (50km from Osaka st.)Other areasFirst priority Second priorityVIEWPOINT4. CURRENT ISSUES WITH REGARD TO SECURING LAND FOR DATA CENTRES4.1. TIME TAKEN TO SECURE POWER SUPPLY IS A BOTTLENECK4.2. DATA CENTRE INVESTMENT STRATEGY©2017 CBRE, Inc. | 10JAPAN DATA CENTRENOVEMBER 2017 CBRE ResearchVIEWPOINT5. APPENDIX5.1. THE INVESTMENT FORMAT FOR THE REAL ESTATE INVESTOR©2017 CBRE, Inc. | 11JAPAN DATA CENTRENOVEMBER 2017 CBRE ResearchVIEWPOINT©2017 CBRE, Inc. | 12JAPAN DATA CENTRENOVEMBER 2017 CBRE ResearchFigure 7 : The investment format for the real estate investorSource : CBRE, November 2017.5.2. DATA CENTRE-SPECIFIC INDICATORSExplanation Specs for general data centresServer room Room for computers 40-50% of gross floor areaRack Racks upon which computers are installed About 3 sq. m. per rackIT Load Power supply to computer excluding power for other facilities such as air-conditioning and lighting 6-8kVA per rack on averagePUE(Power Usage Effectiveness)Ratio of how efficiently a data centre uses energy (where 1.0 is the most effective) PUE=Total Facility Energy/IT Load EnergyEffective value average: 1.5-2.0Figure 8 : Relationship between area/number of racks and electric powerSource : CBRE, November 2017.Disclaimer: All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.VIEWPOINTCBRE GLOBAL RESEARCHJAPAN RESEARCHJAPAN DATA CENTRE©2017 CBRE, Inc