Warburg Pincus Sets Up SE Asia Data Centre Development JV With Evolution

Private equity major Warburg Pincus has formed a joint venture with Singapore-based Evolution Data Centres to develop hyperscale facilities throughout Southeast Asia.

EDC was founded last year with its management team having previously deployed over 640 megawatts of capacity and led more than $1 billion in digital infrastructure transactions in Asia before establishing the company, the partners said Monday in a release. Warburg Pincus will commit capital to the JV from its Asia Real Estate Fund, which achieved a final closing of $2.8 billion in late 2021.

EDC co-founder and CEO Darren Webb said the Warburg funding would help Evolution realise its vision of being the leading sustainable data centre provider in the region.

“I am delighted to announce our new partnership with Warburg Pincus,” Webb said. “It is great to have the backing of such a credible investor who shares our passion for building and operating hyperscale, sustainable data centres across multiple high-growth markets in Southeast Asia.”

Maiden Fund Gets Busy

Manhattan-based Warburg Pincus, which helped set up the platform that evolved into Hong Kong-listed industrial giant ESR, is one of the largest and most active investors in Asia real estate with over $7.5 billion invested in more than 50 ventures.

The firm’s inaugural Asia Real Estate Fund is the second-largest opportunistic real estate investment vehicle currently active in the region, after rival Blackstone’s $9 billion Real Estate Partners Asia III. The strategy aims to invest in assets linked to the region’s “new economy”, including data centres, warehouses, IT offices, life science facilities and rental apartments.

Now the fund will use its resources to address two key challenges identified by EDC: the lack of quality and scale of data centre capacity in emerging Asian markets and the need for sustainable infrastructure in the region.

“Warburg Pincus has an outstanding track record of investing in Asia real estate and digital infrastructure,” said Ed Martin-Sperry, co-founder and chief investment officer of EDC. “We look forward to drawing on their wealth of experience in undertaking large-scale capital expenditure programs in the region as we embark on our next stage of growth.”

Regional Battleground

EDC and its financial sponsor are plunging into a Southeast Asia data centre race contested by multiple startups with big backing.

Singapore-based Digital Edge began construction this month on a 23MW data centre in Jakarta to mark the company’s third project in Southeast Asia, coming on the heels of previous projects in Indonesia and Greater Manila.

Backed by Manhattan-based private equity firm Stonepeak, Digital Edge has secured more than $1 billion in committed capital to establish its pan-Asian digital infrastructure platform, which now extends to at least 14 data centre projects in five countries with 182MW of total power capacity.

Regional players Logos, NTT and ST Telemedia Global Data Centres have announced their own data centre projects and acquisitions in Indonesia, with Singapore-based Princeton Digital Group unveiling its third development in the country in August of last year.

Most recently, US-based EdgeConneX entered the Indonesian market with the acquisition of a local data centre joint venture from Mitsui and Lippo Group’s PT Multipolar Technology. The deal gave EdgeConnex, which is backed by Swedish private equity firm EQT, ownership of a 5MW Jakarta facility with an adjoining site that the firm plans to expand into a 90MW hyperscale data centre campus.