Cli Develop First Data Centre Japan Total Investment 9443 Mil
CapitaLand Investment (CLI) has recently acquired a freehold land parcel in Osaka in order to develop its first ever data centre in Japan. The total investment for this project is estimated to be over US$700 million or $944.3 million. With 50 megawatts (MW) of power capacity already secured, this new data centre will be able to support artificial intelligence (AI) capabilities.
CLI has announced that the data centre will incorporate advanced cooling technologies and adhere to industry best practices for temperature management, making it an energy-efficient facility. The company also plans to use products that have zero ozone depletion potential or a global warming potential (GWP) of less than 100, in order to minimize its environmental impact.
Manohar Khiatani, Senior Executive Director of CLI who oversees the group’s data centre business, believes that this acquisition is in line with the company’s digitalization investment strategy and will expand its geographical reach, particularly in Japan – one of the group’s key markets.
“CLI’s strong financial position allows us to strategically invest in high-quality assets, including data centres, for our future private funds,” he explained. He also pointed out that Japan is a Tier 1 data centre market that is expected to experience tremendous growth.
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Japan’s data centre market is projected to have a compound annual growth rate (CAGR) of 10%, increasing from US$23.8 billion in 2023 to US$38.7 billion in 2038. It is also the largest data centre market in Asia Pacific after China, with a capacity of 1.4 gigawatts, as highlighted by Khiatani.
Khiatani also mentioned that major cloud service providers such as Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle already have a presence in Osaka, making this new data centre strategically placed to meet the growing demand in the city’s established data centre cluster.
Michelle Lee, Managing Director of Private Funds (Data Centre) at CLI, stated that the demand for data centres is expected to continue to grow significantly and surpass new supply in the future. She added that there is a strong institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in this sector.
CLI has successfully raised US$600 million for its data centre development funds in Asia since October 2020. Lee also mentioned that the company is committed to identifying promising investment opportunities for its private fund investors and will continue to expand its portfolio.
CLI has added 23 new data centres to its global portfolio since 2021, and the entire CapitaLand Group now has a total of 27 data centres across Asia and Europe, with around 800 MW of power and approximately $6 billion in assets under management. As of February 3, shares in CLI closed slightly lower at $2.42, a decrease of 4 cents or 1.63%.