Gaw Capital Partners Adds Tokyo Asset to Asia Data Centre Platform

Hong Kong’s Gaw Capital Partners has expanded its Asia data centre holdings with the acquisition of a Greater Tokyo property that will form part of a nearly 40MW IT campus, the firm said in an announcement on Wednesday.

The fund manager has completed the acquisition of the Fuchu Building in Fuchu City’s aptly named Fuchu Intelligent Park from an unspecified vendor, with plans to merge the asset’s 5,479 square metre (58,975 square foot) site with an adjacent property acquired last year to create a facility with an IT capacity of 39MW, according to the statement.

“The acquisition brings significant strategic value to the combined project as well as our Pan-Asia IDC platform, as the increased scale and expansion capacity is highly attractive to operators and hyperscale tenants,” said Gaw Capital Partners head of Japan Isabella Lo. “We see great opportunities in Japan’s real estate market and look forward to exploring further opportunities across various property sectors in the country.”

With Gaw announcing the Japan acquisition just one day after Hong Kong-listed ESR revealed its purchase of a property 12 kilometres (7.4 miles) to the north for its own 40MW data centre, the deal by the high profile deal maker highlights a surge of institutional investment into Japan’s digital infrastructure market, which already accounted for a quarter of Asia Pacific’s IT capacity by the end of 2021, according to a recent report by Knight Frank and consulting firm DC Byte.

First Phase Under Way

Gaw Capital, which did not release the compensation paid for either of its Fuchu City acquisitions, had acquired the neighbouring Meito Sangyo building in July last year, with that project already under construction. Both assets were acquired by vehicles under the firm’s management.

The fund manager plans to use the initial property’s 5,490 square metre site for the first phase of a carrier-neutral Tier III data centre, with the Fuchu Building to make way for phase two. Together the 10,969 square metre site will provide space for 4,040 racks with a total power capacity of 50MW in an established data centre cluster 30 kilometres west of central Tokyo.

“Due to the technological advancements in 5G communications, 4K transmission, Internet of Things (IoT), artificial intelligence, auto-driving and more, there is an ever-growing amount of data traffic driving the demand for data centers to consolidate servers, store data and manage network transport,” said Kok Chye Ong, head of Gaw’s Asia data centre platform outside of China. “Gaw Capital Partners sees its IDC development as part of a bigger story and will continue to make it a focus sector in the future,” Ong added.

Formerly with Singapore’s Keppel Data Centres, Ong had joined Gaw Capital last year during the same month that the firm acquired its first Fuchu City project, with a mission of creating an Asia-wide digital infrastructure platform for the company, after Gaw had established a China data centre joint venture in 2019.

Jamming into Japan

Gaw Capital reached a $1.2 billion first closing on its Gateway Real Estate Fund VII opportunistic vehicle in November of last year, with both data centres as a sector, and Japan as a location, cited as among the strategy’s primary targets.

Even before reaching that fund raising milestone, Gaw had expanded its digital real estate efforts beyond China by establishing a Singapore-based joint venture last July, Data Centre First, in a move to build its regional footprint in the industry.

Announced just two weeks after Ong joined the company, the Data Centre First JV was kicked off with a project at Nongsa Digital Park in Batam, Indonesia – just 30 kilometres off the coast of Singapore.

In Japan, Gaw will join a surge of international capital pursuing digital infrastructure projects in the country, with Singapore-based Digital Edge having acquired five existing data centres in the country for $230 million in December of last year.

Also muscling its way into the market is Australia’s Lendlease, which announced a $600 million data centre in Saitam prefecture, north of Tokyo, in August of last year, and Goodman Group, which teamed up with Singapore’s ST Telemedia Global Data Centres for a pair of Japan projects announced in October.