Singapore’s Digital Edge Investing $120M in Pair of Korean Data Centres

Digital Edge is enlarging its regional footprint, with the data centre startup’s first investment in South Korea coming just months after it was established in August last year.

The Singapore-based data centre operator, backed by New York’s Stonepeak Infrastructure Partners, said Thursday that it would pay cash for the facilities in Seoul’s Gangnam district and Busan’s Centum City development, as well as invest additional capital to expand their capacity and improve their energy efficiency.

Between the transaction and subsequent expansion, Digital Edge expects to invest more than $120 million in the two projects it is acquiring from Korean network carrier Sejong Telecom, the firm said in a release.

“Korea is one of the fastest growing markets in Asia with the most advanced digital infrastructure,” said Samuel Lee, chief executive of Digital Edge. “This transaction provides a great opportunity for multinational companies, as well as Korean businesses, to leverage Digital Edge’s platform to increase their digital footprint in Korea by interconnecting to a rich ecosystem of customers and partners in all key facilities in Seoul and Busan.”

Joining Hands

As part of the transaction, Digital Edge has entered into a long-term strategic partnership with Seoul-based Sejong to bring online data products and services to the marketplace.

“Our partnership with Digital Edge will further accelerate digital transformation opportunities for Korean enterprise customers,” said Yoo Ki-yoon, president of Sejong Telecom. “We look forward to combining access to Digital Edge’s interconnect-rich data centre platform with Sejong Telecom’s advanced network connections to offer a wider range of cloud and network enabled solutions.”

Sejong Telecom’s IDC Yeoksam Center in Gangnam has a power capacity of 10.85MVA and 23,140 square metres (249,077 square feet) of space. The facility has hosted servers in its co-location area for tenants such as Singaporean telecom Singtel and Hong Kong ICT firm PCCW.

The Centum City data centre is at a landing station in Busan for the north ring of the C2C system, an international network of undersea telecom cables. The facility has a power capacity of 3MVA and 9,458 square metres of space.

Regional Platform

Digital Edge said the Korean assets would help form a solid core for the firm’s $1 billion regional data centre platform, which private equity firm Stonepeak launched last August when it announced the closing of a pair of investments in Japan on the day of its debut.

The first of those two Japan projects is a partnership with Keihanshin Building and Kanden Energy Solutions to develop a 12MW facility in Osaka. The second is a strategic partnership with ITOCHU Techno-Solutions for the Mejirozaka Data Center in Tokyo.

North Asia’s Online Drive

The set of Korean and Japanese projects come as increased adoption of 5G and other technical advances help drive demand for cloud services in some of Asia’s wealthiest economies.

South Korea added more than 13 million 5G users in February, according to data from the country’s Ministry of Science and ICT, up by 792,118 from the previous month.

The online transformation has been encouraging investors to launch more data centres in the country, with UK fund manager Actis having gotten in on the act in September with its first server hosting facility in South Korea, a $315 million facility to be built with its joint venture partner, Korean conglomerate GS Group.

Asia Pacific is undergoing significant data centre growth, driven by large-scale international cloud providers as they expand aggressively across major hubs in the region, according to Dutch design consultancy Arcadis.

In a report issued last month on the most attractive places for building data centres, Arcadis ranked Japan third and South Korea 16th among all global markets.