CapitaLand Investment (CLI) has acquired a freehold land parcel in Osaka to develop its first data centre in Japan. The development will entail a total investment of over US$700 million or $944.3 million. Some 50 megawatts (MW) of power capacity have been secured for the project.
According to CLI, the data centre will be ready to support artificial intelligence (AI) capabilities. It will integrate energy-saving solutions such as advanced cooling technologies and adopt industry best practices in temperature management.
The data centre will also use products with zero ozone depletion potential or with global warming potential (GWP) of less than 100 to minimise environmental impact.
Manohar Khiatani, senior executive director of CLI, who oversees the group’s data centre business, says the acquisition aligns with the group’s digitalisation investment theme and enhances its geographical spread, deepening its presence in Japan, which is one of the group’s focus markets.
“CLI’s strong balance sheet gives us the distinct advantage to invest strategically in quality assets including data centres for our future private funds,” he says, noting that Japan is a Tier 1 data centre market that is tipped for “tremendous growth”.
The Japanese data centre market is projected to expand at a compound annual growth rate (CAGR) of 10% from US$23.8 billion in 2023 to US$38.7 billion in 2038. Japan is also Asia Pacific’s largest data centre market outside of China with a 1.4 gigawatt capacity, Khiatani points out.
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“Major cloud service providers such as Amazon Web Services, Google Cloud, Microsoft Azure and Oracle already have a presence in Osaka. Our acquisition is hence well-positioned to capture demand in Osaka’s established data centre cluster,” Khiatani adds.
Michelle Lee, managing director, private funds (data centre) at CLI, said that the demand for data centres is expected to enjoy double-digit growth and outstrip new supply.
“There is strong institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in data centres,” she says.
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Noting that CLI has raised some US$600 million for its data centre development funds in Asia since October 2020, Lee adds that the group will also build on the momentum and identify “compelling investment pipeline opportunities” for its private fund investors.
CLI has added 23 data centres to its global portfolio since 2021. CapitaLand Group has 27 data centres across Asia and Europe with about 800 MW of power and around $6 billion of assets under management on a completed basis.
Shares in CLI closed 4 cents lower or 1.63% down at $2.42 on Feb 3.
