Singapore-based Digital Edge has formed a $100 million joint venture with a Philippine real estate firm to build a 10 megawatt data centre in the Greater Manila area to supply the growing server hosting needs of a burgeoning tech sector.
Digital Edge said it teamed up with the Rufino clan’s Threadborne Group family office to build a data centre in Laguna province, an industrial investment hub in the southeastern part of the Greater Manila area, in a bid to provide colocation and interconnection services to both local and international clients in the area as it expands its Southeast Asia platform.
Projected to become the largest operational carrier-neutral data centre in the Philippines, the project will mark Digital Edge’s thirteenth data centre facility across four Asian countries, and comes five months after the startup announced its Southeast Asia project in mid-June with a $165 million investment in Indonesia.
“The Philippines is an underserved market with huge demand for data center capacity and, together with the Threadborne Group, we intend to be at the forefront of developing the critical data center infrastructure for this market,” Samuel Lee, chief executive officer of Digital Edge, said in a release on Thursday. “This venture is another step forward in the company’s ambition to transform Asia’s digital infrastructure by building and operating the most energy efficient and connectivity-rich data centers in key emerging markets.”
Manila Gets Efficient
With construction ongoing, the data centre in Laguna province, just south of Manila, is expected to be completed in the fourth quarter of 2022 with the goal of establishing one of the most advanced server hosting facilities in Asia in terms of efficient energy and water consumption.
Digital Edge, an Asian data centre provider backed by New York-based private equity firm Stonepeak Infrastructure Partners, said they are aiming to obtain local and international green certifications with the goal of achieving at power usage effectiveness (PUE) of 1.193 and a water usage effectiveness (WUE) of 1.355, despite the country’s tropical climate.
The co-location market in the Philippines is expected to expand by a compound annual growth rate of 22 percent in the next five years and become a $313 million market by 2026, supported by a trend toward decentralizing hyperscale cloud platforms, according to estimates from consultancy firm Structure Research cited by Digital Edge.
With Alibaba Cloud having announced plans for its first data centre in the Philippines during June, the US-based research firm predicts that other cloud providers will soon expand their services to the mobile data-hungry Southeast Asian nation.
Aside from its Southeast Asian activities, Digital Edge has been expanding its footprint in other parts of Asia including Japan, where just last week it announced the $230 million acquisition of five facilities. That deal added 18.5 megawatts of power capacity to Digital Edge’s network after the firm had acquired two data centres in South Korea during April.
Partnering With the Powers That Be
“Digital Edge’s knowledge and experience in designing, constructing, and operating data centers combined with our local real estate and customer knowledge, has created a solid foundation on which to grow this partnership,” said Raymond Rufino, principal for investments and real estate at the Threadborne Group. “We are already receiving very positive feedback from a number of potential customers and are confident that this is just the beginning.”
Digital Edge holds a majority stake in its JV with Threadborne Group, a family office focused on real estate and technology. The private investment firm manages the fortune of one of the Rufino clan, which established several of the first banks in the Philippines, including setting up what is now Security Bank in 1951.
As the son of Filipino real estate magnate Carlos Rufino, Raymond Rufino is also the chief executive officer of local developer NEO Office Ph, which focuses on office buildings in Bonifacio Global City, a financial district southeast of Manila.
With Digital Edge setting up its carrier neutral facility, local telecom giants are also moving to upgrade their infrastructure with PLDT in October announcing a plan to build the country’s first hyperscale data centre, while internet provider Converge ICT has also recently announced its own plan to set up a PHP 1 billion ($20 million) server hosting facility in Cebu.
The size of the data centre market in the Philippines is expected to grow at a compound average rate of over 11.4 percent from 2020 through 2026, according to a report published in September by Arizton Advisory and Intelligence, driven by demand from enterprises and cloud service providers looking to co-locate their workloads.