CapitaLand Investment (CLI) has recently acquired a freehold land parcel in Osaka in its effort to expand into the data centre market in Japan. The development of the data centre will require an investment of over US$700 million or $944.3 million. The project has secured 50 megawatts (MW) of power capacity.
CLI stated that the data centre will be equipped with advanced cooling technologies and will follow industry standards in temperature management to ensure energy efficiency. The data centre will also use environmentally friendly products with zero ozone depletion potential or with a global warming potential (GWP) of less than 100.
CLI’s Manohar Khiatani, senior executive director in charge of the group’s data centre business, says that the acquisition is in line with the group’s focus on digitalisation and will expand its presence in Japan.
Khiatani also notes that Japan is a leading data centre market with a projected compound annual growth rate (CAGR) of 10% and is expected to reach a value of US$38.7 billion in 2038. He adds that Japan has the largest data centre market in Asia Pacific outside of China, with a capacity of 1.4 gigawatts.
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CLI points out that major cloud service providers, such as Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle, have already established a presence in Osaka. This makes CLI’s acquisition strategically positioned to capture the growing demand in the established data centre cluster in Osaka.
Michelle Lee, managing director of private funds (data centre) at CLI, expects double-digit growth for data centres and a higher demand than supply. She says that there is also strong institutional interest in data centre investments, with 97% of investors planning to increase their investments in this sector.
Lee adds that CLI has successfully raised US$600 million for its data centre development funds in Asia since October 2020. She believes that the group will continue to identify promising investment opportunities for its private fund investors.
CLI has added 23 data centres to its global portfolio since 2021. On a completed basis, CapitaLand Group has 27 data centres across Asia and Europe, managing around $6 billion in assets with an 800 MW power capacity.
As of February 3, shares in CLI closed at $2.42, down by 1.63% or 4 cents.