Singapore’s GIC Leads $800M US Data Centre Deal

A group of investors led by Singapore’s sovereign wealth fund GIC is betting $800 million that the US will need more storage space for an exponentially growing universe of data.

GIC has teamed up with Denver-based investment firm Mount Elbert Capital Partners and Canadian pension fund manager OPTrust to create EdgeCore Internet Real Estate, LLC, a vehicle that will develop, acquire and operate data centres in North America. The venture will have an initial capitalisation of over $800 million of equity, which is expected to support about $2 billion in development and investment.

GIC, which has an estimated $359 billion of global assets under management, will be the anchor investor in the new venture, according to a statement released today. The sovereign fund manager is just the latest Singaporean player to invest in homes for the digital cloud, after Mapletree Group invested $750 million in US data centres last October.

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New Firm To Kick off Platform with Six Data Centres

Mount Elbert CEO Tom Ray will lead the new venture as chairman and CEO of EdgeCore. Ray served as CEO of US data centre REIT CoreSite Realty until July 2016.

“We are excited to execute upon our shared vision of creating a scalable North American data center platform and we look forward to expanding with GIC and OPTrust as we work to grow EdgeCore Internet Real Estate beyond our initial roll out,” commented Ray in the statement.

EdgeCore will kick things off with data centre campus developments in six markets. The company owns land in Mesa, Arizona and plans to close on existing deals to acquire land in Dallas, Texas and Reno, Nevada before the end of this quarter. Construction is slated to start immediately upon acquisition of the sites.

Each campus is designed to provide between 100 and 200 megawatts of critical power, and the first building in these markets is expected to be completed later this year. The firm also plans to hunt for land in three complementary top-tier markets, with the aim of breaking ground on each campus within the year.

Singaporean Investors Like Server Sheds

“As a long-term value investor, we believe the secular growth in data consumption and public cloud usage will generate attractive returns in the data center sector,” commented Lee Kok Sun, chief investment officer of GIC Real Estate in the statement.

The sovereign investor’s latest deal builds on growing Singaporean interest in the data centre sector. Last October, a joint venture of Singapore’s Mapletree Investments and Mapletree Industrial Trust (MIT) – a listed trust managed by the company – purchased a portfolio of 14 US data facilities for $750 million.

The venture bought the assets from Carter Validus Mission Critical REIT, a non-traded real estate investment trust sponsored by US commercial property firm Carter Validus.

In the same month, Canada Pension Plan Investment Board (CPPIB) teamed up with the city state’s Keppel Group to invest $350 million in data centres across Asia Pacific and Europe.

GIC’s new North American partner, OPTrust, manages the OPSEU Pension Plan, which is jointly sponsored by the government of Ontario and the Ontario Public Service Employees Union (OPSEU). The trust has net assets of C$19 billion.