Private equity-backed internet infrastructure startup Digital Edge has agreed to acquire two fully operational data centres in Tokyo to add 7MW of capacity to its growing collection of facilities in Asia Pacific.
The Singapore-based data centre operator, backed by New York’s Stonepeak Infrastructure Partners, will pay an undisclosed sum to local telecom Arteria Networks Corporation for ComSpace I in Nihonbashi district of Chuo ward and ComSpace II in Shinjuku ward.
The planned acquisitions come on the heels of last month’s announced purchase of two South Korean data centres by Digital Edge, which was founded only last August.
“We are thrilled to have achieved so much, in so short a time and in such strategic markets as Japan and Korea,” Samuel Lee, chief executive of Digital Edge, said in a release. “I look forward to a long and successful partnership with Arteria, and to continuing to identify other opportunities to expand in line with market demands and better support our customers in their digital transformation journey.”
Servers in the City
The pair of facilities, both of which are located within the 23 wards of central Tokyo, add a total of 7MW of capacity to Digital Edge’s APAC arsenal.
Situated in the historic business district of Nihonbashi, ComSpace I has a power capacity of 3MW and features 3,641 square metres (39,191 square feet) of floor area. The 21-year-old facility at Horidomecho 1-5-3 in Chuo counts network operators, internet service providers and data centre operators as its main customers.
ComSpace II in buzzy Shinjuku has 4MW of power supply, according to information service provider DC Byte. The 20-year-old property sprawls across 9,336 square metres of floor area and serves application service providers, communication service providers, managed service providers and hosting service operators.
The transactions for the two projects are expected to close in two phases, Digital Edge said. The first phase is already completed, and the second-phase closing is expected in the second quarter of 2021, subject to customary closing conditions.
Stonepeak joined with Digital Edge’s management and a set of unnamed investors to commit $1 billion in equity to the new Digital Edge platform last year, aiming to catch some of the potential of the Asia Pacific market after having acquired a majority interest in US co-location provider Cologix in 2017.
On the day of its debut, Digital Edge announced the closing of two Japan investments: a partnership with Keihanshin Building and Kanden Energy Solutions to develop a 12MW data centre in Osaka (scheduled to open in the first quarter of 2022), and a strategic partnership with Itochu Techno-Solutions on the Mejirozaka Data Center in Tokyo.
More recently, Digital Edge sought to enlarge its regional footprint with the acquisition of facilities in Seoul’s Gangnam district and Busan’s Centum City development. Between the purchases, due to close in the second quarter of 2021, and subsequent planned expansions, Digital Edge expects to invest over $120 million in the Korean projects.
Upon the completion of its transactions in Japan and the opening of the Osaka facility, Digital Edge will have invested over $200 million to offer customers more than 5,300 cabinets of data centre capacity.
The public cloud services market in the world’s third-largest economy is set to grow by nearly 18.7 percent annually between 2019 and 2024 to reach about $26.4 billion, the firm said, citing US government statistics.
In a paper released this week, property services provider JLL also highlighted Japan as a data centre hotspot. Because demand is high and financing is low-interest, companies are prioritising stable power in a stable location over cheap power, said Ralph Davidson, executive director and head of regional industries for APAC at JLL.
“Japan is one of the most expensive markets but it’s a key data centre market from the fact it’s a stable country with good connectivity in a good geographical location,” Davidson said.