CapitaLand Investment establishes China data centre development fund

CapitaLand Investment Limited (CLI) has recently announced its decision to establish a China data centre development fund, CapitaLand China Data Centre Partners (CDCP), with an initial investment of $1 billion.

The total equity committed to CDCP amounts to $530 million. Existing and new global institutional investor clients hold 80% effective stake in CDCP with CLI holding the remaining 20%.

The move to create a data centre in China is part of CLI’s strategy to grow its portfolio of new economy assets under management and enhance long-term business resilience.

CapitaLand’s China Data Centre partners have committed to develop two hyperscale data centres in Greater Beijing in order to bring CapitaLand’s data centre portfolio to 26 data centers across Asia and Europe.

Upon its completion, these two projects are expected to add approximately $1 billion to CLI’s funds under management.

The projects are set for completion in 2025 and will deliver over 100 megawatts (MW) of power to meet the growing demand from the world’s most populous national capital city.

In a statement, CapitaLand said that the two data centres are poised to capture strong demand from Beijing because these are located close to established data centre clusters and key network nodes of leading Chinese cloud service providers and internet companies.

“As one of the fastest growing new economy asset classes providing critical digital infrastructure for the global economy, data centres present a tremendous opportunity and are a key strategic focus for CLI. We have built core competencies in data centre design, development, commercial sales and operations, with 26 data centres across Asia and Europe that will offer more than 500 MW of power on a completed basis. We are seeing strong investor interest as the surge in demand for cloud computing, 5G technology, and e-commerce are driving growth in this sector,” said Patrick Boocock, CEO, Private Equity Alternative Assets, CLI.

Boocock, who also oversees the growth of CLI’s global data centre business, said they leverage on their strength in real estate as they are also actively building their capabilities in real assets and as they continue to grow alternative assets platform.

The CDCP, according to Boocock, is already their third data centre development fund, following the establishment of two other funds in South Korea.

Puah Tze Shyang, CEO of CLI China, said that a leading global real estate investment manager with about 30 years of experience in China, they are able to leverage on their wide network and deep expertise to bring quality assets to international investors who are keen to invest in China across different asset classes, including data centres.

He said that CLI’s competitive advantage lies in their position as a vertically integrated group in China with a full range of capabilities, from investment sourcing, development, and having a strong customer network to operations.

CLI, he said, has $46 billion in assets under management in China.

Michelle Lee, Managing Director, Private Funds (Data Centre), CLI, said that CDCP will invest in two highly sought-after data centre projects in prime locations.

Lee said that the China data centre market is currently the second largest in the world and the largest in Asia Pacific. This is projected to grow 24% annually until 2025.