BDx Acquires Singapore Data Centre From Hwa Hong for $104M

An entity linked to Singapore-based data centre developer and operator BDx has acquired an industrial building that houses the company’s sole data centre in the city-state from Hwa Hong Corp for an estimated S$140 million ($104 million).

After operating a data centre in the property for the past four years, BDx purchased OneTen Paya Lebar in Singapore’s Paya Lebar area at S$900 per square foot, according to sources familiar with the transaction. That rate represents a 12.5 percent discount to Hwa Hong Corp’s asking price of S$160 million (S$1,029 per square foot) when the Singapore-based property investment company put the asset up for sale last September.

“This transaction is a key indicator as to the severe scarcity of power supply and data centre colocation provision in Singapore. This was confirmed by the significant amount of interest generated in the building both from hyperscalers, owner occupiers and private individuals,” said Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore, which along with Cushman & Wakefield advised on the transaction.

After shifting its headquarters to Singapore in 2022, BDx is acquiring the freehold property as co-location data centres in the city-state currently operate at 1 percent vacancy – the lowest in Asia Pacific – according to a February report by Cushman & Wakefield.

BDx’ website shows the data centre having a capacity of 9.6MW, which would price the deal at $10.83 million per MW, with the company saying in an undated blog post that it had upgraded the facility to 14MW. BDx and Hwa Hong Corp had not replied to Mingtiandi inquiries by the time of publication.

Capacity Upgrade

Located at 110 Paya Lebar Road near the Tai Seng Avenue data centre cluster, the property has a gross floor area of 155,503 square feet (14,447 square metres) spanning eight storeys, according to Savills. The property currently features 1,800 racks and a floor-to-ceiling height of 4,200 millimetres, along with 4,181 square metres of gross white space.

OneTen Paya Lebar, which was Hwa Hong Corp’s largest investment property in Singapore, was originally leased to former telecom services provider Pacnet (later acquired by Australia’s Telstra) on a “shell and core” basis after Hwa Hong undertook an asset enhancement exercise for the property in 2013. Zoned for “Business 1” use, the property was approved by Singapore’s Urban Renewal Authority for use as a co-location data centre in 2014.

BDx took over the facility and existing lease from Telstra in 2020, with that deal in place through 2028 with built-in rental escalations.

“By opting to acquire their operating premises, BDx would be able to better control occupancy costs and inject more certainty in their future business plans,” said Brenda Ong, executive director of logistics and industrial at Cushman & Wakefield Singapore.

BDx had initiated a capacity upgrade on the property in 2021, which improved energy efficiency by 20 percent and increased the asset’s total capacity to 14MW from 3.6MW when the company began leasing the building.

Following the upgrade, the property’s valuation rose to S$105 million as of April 2022 from S$96.4 million as of December 2021, according to Hwa Hong statements, with the group’s managing director Ong Eng Yaw telling local media that BDx had created “significant value” for the property.

The transaction, which was first reported by the Business Times, was marketed through an expression of interest exercise that closed in October.

Hwa Hong Downsizing

Having raised more than $1 billion in equity, BDx has grown its portfolio to include projects in Singapore, Hong Kong, Guangzhou and Nanjing, as well as Indonesia, where it announced plans last month to acquire the data centre portfolio of Jakarta-based Indosat Ooredoo Hutchison for IDR 2.6 billion ($170 million).

Originally part of what is now Li Ka-shing’s CK Hutchison Holdings, BDx is a portfolio company of Miami-based infrastructure investment firm I Squared Capital and was spun off from HGC (formerly Hutchison Global Communications) in 2020.

Hwa Hong’s divestment aligns with the group’s pivot to commercial and residential investments in the UK and Australia, with Ong telling local media last year that returns in those markets have outstripped what the company could achieve in the Lion City.

Last year, the real estate firm sold a pair of low-rise office buildings between the Boat Quay and Clarke Quay areas to Singapore-listed builder SLB Development for S$13.58 million ($10.26 million). Hwa Hwong Corp was privatised in 2022 amid a long-standing dispute among the descendants of the firm’s deceased patriarch Ong Chay Tong.