IGIS Asia Closes 2nd Data Centre Fund at $151M

IGIS Asia Investment Management, the pan-Asia fund management arm of South Korea’s IGIS Asset Management, has closed on its second data centre fund with a haul of KRW 190 billion ($151 million) as the Greater Seoul area emerges as a key hub for server facilities.

The Singapore-based company raised money for the new fund from investors based in the city-state as well as Seoul-headquartered IGIS Asset Management, which had roughly $44.9 billion in assets under management as of year-end 2022. IGIS AIM is reviewing seed assets to include in the vehicle, including assets it previously secured.

The new fund comes after IGIS AIM created its first data centre fund in August 2021. The vehicle attracted US-based investors and developed a data centre project in Hanam, a city just east of Seoul in Gyeonggi province, as its inaugural investment. The Hanam IGIS Data Centre broke ground in October 2021 and is slated for completion later this year.

IGIS Branches Out

IGIS AIM has also launched two logistics funds and is preparing a new fund to invest in life sciences and content studios. In September of last year, the fund manager formed a $1 billion joint venture with Canada’s QuadReal Property Group to develop logistics assets in South Korea.

The partnership calls for QuadReal to provide the majority of the JV’s capital, while the IGIS team is responsible for originating, developing and operating the assets. Properties under the venture will be designed and developed to cater to e-commerce, 3PL, retail and cold storage firms as Korean retail continues to shift online.

Founded in mid-2020, IGIS AIM is an overseas subsidiary of real estate-focused Korean investment giant IGIS Asset Management, which IREI ranked last year as the second-largest manager of Asian real estate behind GLP, with a $33.25 billion portfolio.

Data centres account for 5 percent of the parent company’s domestic investments at present, with mixed-use properties taking up 36 percent followed by office at 22 percent. IGIS Asset Management has previously made inroads in the global logistics market through deals such as acquisitions of Amazon warehouses in the US and DHL properties in Italy.

The company has also picked up office and multi-family assets in the US. In July 2022, IGIS Asset Management led a consortium with its longtime partner, US private equity firm KKR & Co, to acquire the Shinhan Investment Corp. headquarters in Seoul’s banking district for KRW 639.5 billion.

Emerging Hotspot

The Korean capital is a growing target for data centre investment, with property brokerage Cushman & Wakefield noting in a December update that US-based data centre REITs have driven expansion in the Greater Seoul market since 2021.

Global cloud service providers whose deployments are currently limited to colocation are also generating robust demand for data centres in Seoul, the report adds. Greater Seoul has 330 megawatts in operation, with a 4 percent vacancy rate, and another 592MW planned or under construction.

Among the foreign entrants into the market, Singapore-based data centre startup Digital Edge set up a KRW 1 trillion joint venture with SK Ecoplant to build a 120MW data centre in Incheon, near Seoul, that will rank as the country’s largest when completed.

Another Singaporean investor, SC Capital Partners, launched an Asia data centre platform in February 2022, starting with the development of a 45-megawatt data centre in Seoul at an expected cost of $500 million.