Keppel Data Centre Fund to Develop $210M Facility Near Beijing

Keppel Data Centre Fund II has entered a partnership with a Tianjin-based conglomerate to develop a RMB 1.4 billion ($210 million) data centre near Beijing, marking Singaporean giant Keppel Corporation’s sixth server-hosting facility in China.

KDCF II will acquire a majority stake in Huailai Data Centre and jointly develop the property with Heying, a wholly owned subsidiary of Tianjin Zhengxin Group, according to a Monday announcement by Keppel Capital, which manages the closed-end vehicle under its Alpha Investment Partners private fund management division.

Located in Hebei province’s Huailai county, the greenfield data centre is situated on a 3.3 hectare (8.2 acre) plot that forms part of a larger campus spanning 29.7 hectares. The facility will have an expected gross floor area of 678,807 square feet (63,063 square metres), with space for more than 5,700 high-density racks, when fully developed by the end of the first quarter of 2023.

“We are pleased to partner with Heying to enter into one of China’s largest data centre hubs,” said Alpha CEO Alvin Mah. “Demand for data centres in China has been resilient, attracting strong investor interest.”

Dominant Market

The Huailai campus is located 65 kilometres (40.4 miles) from central Beijing and 70 kilometres from Beijing Capital International Airport.

The new facility, which has received indications of interest from a major cloud service provider, will draw on a Greater Beijing market that reached RMB 30 billion in size in 2020, making it China’s largest data centre market, Keppel said, citing research by Kezhi Consulting. The project will bring the group’s mainland China portfolio to 1.5 million square feet of GFA and 140 megawatts of power capacity.

In April, Keppel marked the official opening of Huizhou Data Centre, a RMB 1.5 billion project developed at Tonghu Smart City in Guangdong province under the earlier Alpha Data Centre Fund.

The Huizhou facility has a total GFA of 486,700 square feet and more than 6,000 high-density racks, with the potential to expand by a further 538,200 square feet. The data centre has engaged a major telecom firm as an anchor customer, in addition to receiving strong capacity demand from other telecoms, cloud operators and tech companies, Keppel said.

The Singaporean group also expects its Greater Shanghai Data Centre under KDCF II to be ready for service by the first quarter of 2023, with a total GFA of 323,684 square feet and capacity for 3,000 racks.

Putting Capital to Work

Keppel announced a $1.1 billion final closing of KDCF II in January of this year, picking up a $150 million commitment from China’s Asian Infrastructure Investment Bank for the vehicle targeting investments in Asia and Europe.

In addition to AIIB’s share, KDCF II attracted investments from sovereign wealth funds, financial institutions, insurance funds and pension funds as it surpassed its target size of $1 billion.

The fund works in concert with Keppel Data Centres, a sister division of the conglomerate, to capture investment opportunities in greenfield and brownfield assets, tapping the latter’s expertise in developing, operating and maintaining data centres, according to Keppel.

KDC Fund II is the follow-up to the 2016-vintage Alpha Data Centre Fund, which has acquired or developed facilities in Singapore, Malaysia, Indonesia, Germany, Australia and China.