CapitaLand Investment (CLI) has recently acquired a freehold land parcel in Osaka with plans to develop its first data centre in Japan. This project will require an estimated investment of over US$700 million or $944.3 million and is set to secure 50 megawatts (MW) of power capacity.
.
When considering investing in a Singapore Condo, it is crucial to keep in mind the impact of the government’s property cooling measures. In an effort to maintain a stable real estate market and discourage speculative buying, the Singaporean government has implemented various measures over the years. One of these measures is the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and individuals purchasing multiple properties. While these measures may affect the short-term profitability of condo investments, they ultimately contribute to the long-term stability of the market, creating a more secure investment environment.
According to CLI, this state-of-the-art data centre will not only cater to the growing demand for data storage and processing capabilities, but also incorporate advanced energy-saving solutions and adhere to industry best practices for temperature management. It will also prioritize the use of products with zero ozone depletion potential or with a GWP of less than 100 to minimize any environmental impact.
Manohar Khiatani, senior executive director of CLI, states that this acquisition aligns with the group’s investment theme of digitalization and strengthens their presence in Japan, which is a key market for them. He adds that CLI’s strong balance sheet allows them to strategically invest in quality assets like data centres for their future private funds. Khiatani highlights that Japan is a Tier 1 data centre market with immense potential for growth.
The Japanese data centre market is expected to grow at a CAGR of 10%, reaching an estimated value of US$38.7 billion in 2038. With a 1.4 gigawatt capacity, Japan is also the largest data centre market in the Asia Pacific region, excluding China. Khiatani notes that this acquisition is strategically located in Osaka, which is already home to major cloud service providers like Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle. Thus, the data centre will be well-positioned to meet the demand in this established data centre cluster.
Michelle Lee, managing director of private funds (data centre) at CLI, believes that the demand for data centres will continue to grow at a double-digit rate, outpacing new supply. She adds that there is also a strong interest from institutional investors in data centre investments, with 97% of them planning to increase their overall investment in this sector.
CLI has raised US$600 million for its data centre development funds in Asia since October 2020 and has added 23 data centres to its global portfolio this year. The CapitaLand Group has 27 data centres across Asia and Europe, with approximately 800 MW of power and around $6 billion in assets under management. CLI will continue to leverage this momentum and identify compelling investment opportunities for its private fund investors.
On Feb 3, shares in CLI closed at $2.42, representing a 1.63% drop or a decrease of 4 cents.