CapitaLand Investment (CLI) has recently acquired a freehold land parcel in Osaka for the development of its first data centre in Japan. With an investment of over US$700 million or $944.3 million, the data centre project is expected to have a power capacity of 50 megawatts (MW).
CLI has stated that the data centre will be equipped with advanced cooling technologies and adhere to industry best practices in temperature management to reduce energy consumption. Additionally, the data centre will utilize environmentally friendly products with zero ozone depletion potential or global warming potential of less than 100.
According to Manohar Khiatani, Senior Executive Director of CLI, the acquisition aligns with the company’s investment theme of digitalization and strengthens its presence in one of its focus markets, Japan. He also states that CLI’s strong financial position allows them to strategically invest in quality assets like data centres for their future private funds.
CLI highlights that Japan is a Tier 1 data centre market with tremendous growth potential. It is expected to expand at a compound annual growth rate of 10% from US$23.8 billion in 2023 to US$38.7 billion in 2038. Furthermore, Japan is also the largest data centre market in Asia Pacific, excluding China, with a capacity of 1.4 gigawatts.
Michelle Lee, Managing Director of Private Funds (data centre) at CLI, notes that the demand for data centres is expected to experience double-digit growth, surpassing new supply. She also mentions that there is significant institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in data centres.
With the recent success of raising US$600 million for their data centre development funds in Asia, CLI plans to continue identifying attractive investment opportunities for their private fund investors. Since 2021, CLI has added 23 data centres to their global portfolio, bringing their total to 27 data centres across Asia and Europe with around 800 MW of power and $6 billion of assets under management.
On Feb 3, shares in CLI closed at $2.42, 4 cents lower or 1.63% down.
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