CapitaLand Investment (CLI) has announced its acquisition of a freehold land parcel in Osaka. This deal marks the company’s first foray into the data centre market in Japan, with a total investment of US$700 million or $944.3 million. With a secured power capacity of 50 megawatts (MW), CLI plans to develop a data centre that will support advanced artificial intelligence (AI) capabilities and incorporate energy-efficient solutions such as advanced cooling technologies.
According to CLI, the data centre will also adopt industry best practices in temperature management and use environmentally-friendly products with zero ozone depletion potential or a low global warming potential (GWP) to minimize its impact on the environment.
AdvertisementManohar Khiatani, Senior Executive Director of CLI, who is responsible for the group’s data centre business, shared that this acquisition is in line with the company’s digital investment theme and will expand its presence in Japan, one of its key markets. He added, “CLI has a strong balance sheet, which gives us the advantage to strategically invest in high-quality assets including data centres for our future private funds.”
Khiatani emphasized that Japan is considered a Tier 1 data centre market with tremendous growth potential. He pointed out that the Japanese data centre market is expected to grow at a compound annual growth rate (CAGR) of 10% and reach US$38.7 billion by 2038. Notably, Japan is the largest data centre market in the Asia Pacific region, excluding China, with a capacity of 1.4 gigawatts.
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“Major cloud service providers like Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle have already established a presence in Osaka. Our acquisition is well-positioned to capture the demand in this established data centre cluster,” Khiatani explained.
Michelle Lee, Managing Director, Private Funds (Data Centre) at CLI, shared that the demand for data centres is expected to experience double-digit growth, outpacing the supply of new data centres. “There is a strong institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in this sector,” she added.
Lee also revealed that CLI has raised US$600 million for its data centre development funds in Asia since October 2020. She added that the company will continue to identify attractive investment opportunities for its private fund investors and build on its existing portfolio of 23 data centres.
CLI currently has 27 data centres across Asia and Europe with over 800 MW of power and around $6 billion of assets under management. Its shares were down 1.63% at $2.42 on Feb 3.