CapitaLand Sets Up China Data Centre Development Fund With $750M Beijing Plan

Singapore’s CapitaLand Investment has established a China data centre development fund with plans to invest in two Greater Beijing hyperscale projects that are seen adding S$1 billion ($750 million) to the firm’s funds under management upon completion.

The equity committed to CapitaLand China Data Centre Partners amounts to S$530 million, with existing and new global institutional clients holding an 80 percent effective stake in the fund. CapitaLand Investment, the SGX-listed fund management arm of property giant CapitaLand, will hold the remaining 20 percent in the vehicle, the firm said Wednesday in a release.

The data centre development projects are expected to be completed in 2025 and deliver more than 100 megawatts of power. With their proximity to data centre clusters and key network nodes of Chinese cloud service providers and internet companies, the facilities will capture strong demand from Beijing, according to CapitaLand Investment.

“CDCP is our third data centre development fund, following the establishment of two such funds in South Korea,” said Patrick Boocock, CEO of private equity alternative assets at CapitaLand Investment. “We are excited to bring our capabilities to the China market and advance our ambition of becoming a major global digital infrastructure player.”

Digital Infrastructure Grows

As one of the fastest-growing new economy asset classes, data centres are a key strategic focus for CapitaLand Investment, said Boocock, who also oversees the growth of the firm’s global data centre business.

“We have built core competencies in data centre design, development, commercial sales and operations, with 26 data centres across Asia and Europe that will offer more than 500MW of power on a completed basis,” he said.

No details were disclosed about the physical size and precise location of the new data centres, but CapitaLand Investment said the two facilities will be built to LEED Gold standards and use energy-saving features such as high-efficiency fan wall cooling systems and recycled waste heat from the servers to heat offices.

The data centres will also feature rooftop solar energy systems to generate on-site renewable power to reduce carbon footprint and intelligent infrastructure management systems to optimise and improve energy efficiency, the fund manager said.

CapitaLand Investment set up its Korean data centre funds in October 2020 and May 2021 with 100 percent third-party capital. In total, CapitaLand’s data centre portfolio has assets under management of S$6 billion on a completed basis.

APAC Heavyweight

China’s data centre market is the second largest in the world and the largest in Asia Pacific, with 447 facilities compared with Australia’s 279 and Japan’s 207, according to a Savills report from mid-2022. IDC Quan estimated the Chinese data centre market’s size in 2020 at RMB 223.9 billion (now $32.5 billion).

Last February, Blackstone announced an additional $250 million investment in Beijing-based data centre operator VNET, betting on demand for more server capacity in mainland China.

That same month, Bloomberg reported that Singapore-based GLP was considering a $500 million capital raise to help expand its China data centre platform.