CapitaLand Ascendas REIT Enters Japan With $460M Osaka Data Centre Buy

CapitaLand Ascendas REIT is entering Japan’s data centre market with a S$620.7 million ($460 million) investment in a Greater Osaka hyperscale facility, as the Singapore-listed trust ramps up its exposure to digital infrastructure.

The deal marks CLAR’s first foray into Japan, with the trust acquiring a 49 percent stake in the data centre alongside a fund managed by Mitsui & Co Realty Management, according to a Tuesday announcement. The digital bet builds on earlier moves by CLAR’s sponsor, Temasek-controlled CapitaLand Investment, which last year acquired land in Osaka to develop a S$700 million data centre.

The latest buy comes as Japan’s data centre capacity is projected to grow at a 24 percent compound annual rate through 2030, according to Cushman & Wakefield, driven by AI-related demand and cloud adoption — with Osaka emerging as a key secondary hub after Tokyo.

“CLAR’s new expansion into Japan reflects our disciplined approach to scaling and diversifying CLAR’s global data centre portfolio across key established digital hubs with strong demand drivers and connectivity,” said William Tay, CEO and executive director of the REIT’s manager, which is owned by CapitaLand Investment.

Two Singapore Acquisitions

The data centre deal is part of S$1.4 billion in acquisitions disclosed by CLAR on Tuesday, including the S$504.2 million purchase of a logistics asset in the trust’s Singapore hometown and a S$245 million investment for a half-stake in a city-state business park property.

The REIT is buying 25 Loyang Crescent, a cluster of ramp-up logistics buildings near Changi Airport, through a sale-and-leaseback arrangement with vendor and occupier Toll Group, the Melbourne-based freight company owned by Japan Post. The asset is expected to provide stable income backed by long leases to established tenants, in line with CLAR’s focus on logistics and supply-chain-linked properties.

Toll chairman Thomas Knudsen said in a separate statement that the transaction would allow the group to “unlock capital from its real estate assets” while maintaining operational continuity through a long-term leaseback, as part of a strategy to optimise its balance sheet and reinvest in core logistics operations.

CLAR is picking up a 50 percent interest in Ascent at 2 Science Park Drive in Queenstown from a private trust held by CapitaLand Group, with a global sovereign wealth fund taking the remaining stake, the manager said. The seven-storey property has 55.5 years left on its 99-year leashold, with its 43,000 square metres (462,848 square feet) of net lettable area occupied by “reputable multinational corporations and public listed companies”. 

The acquisition follows CLAR’s S$544 million purchase last year of business park assets in the Lion City, including the Shopee head office at 5 Science Park Drive and a data centre at 9 Tai Seng Drive in Hougang.

Evolving Portfolio

Upon completion of the latest deals, Singapore will remain CLAR’s core market, accounting for 66 percent of the REIT’s S$19.9 billion portfolio by assets under management.

At the same time, the Osaka data centre investment signals a shift towards expanding the trust’s global data centre footprint into new developed markets, complementing existing exposure in the US and Europe. CLAR also noted potential to increase capacity at the Japan asset by 5.4 megawatts, or 13.3 percent, as demand from hyperscalers continues to rise.

The three acquisitions are expected to lift CLAR’s portfolio occupancy to 91.5 percent and extend weighted average lease expiry to 4.3 years.

The deals follow S$845.7 million in industrial acquisitions completed by CLAR between December and February, including a S$565.8 million set of three Singapore properties, a S$94.5 million DHL warehouse in Ohio and a S$185.4 million portfolio of six Spanish sheds.