Macquarie Said in Due Diligence to Buy Seoul Data Centre From IGIS

Korea’s IGIS Asset Management has selected Macquarie Asset Management as the preferred bidder for a data centre near Seoul as an undersupplied market heats up competition for digital infrastructure assets in the North Asian nation.

The Australian investment manager is now in due diligence for the purchase of the Hanam Data Center, a 40MW facility set to launch this year in Gyeonggi province outside of Seoul, according to market sources who confirmed earlier reporting by Seoul Property Insight.

Pricing for the property, which IGIS has leased to South Korean Internet giant Kakao, has not been made public, with analysts pointing to a shortage of server facilities near the Korean capital.

“Greater Seoul has only about 500MW of live IT and 1.3GW in the pipeline, of which 52 percent of the under construction IT has already been pre-leased,” Jingwen Ong, APAC research manager for consultancy DC Byte told Mingtiandi. “The market is one of the most difficult for supply delivery in APAC at the moment, which is likely going to become increasingly challenging with the new power regulations that are about to be implemented soon.”

An energy law is supposed to take effect this year requires all data centres in Seoul to appraise their power use and pushes for decentralisation of digital infrastructure away from the capital.

Completed Project

The Hanam Data Center is believed to be ready to begin operation shortly with IGIS having been developing the project together with data centre operator LG CNS and contractor Samsung C&T following ground-breaking in October 2021.

The project was funded through IGIS’ first data centre fund, with the company having closed on a second digital infrastructure vehicle early last year having raised $151 million in equity. Sources at Macquarie Asset Management and IGIS had not yet replied to inquiries from Mingtiandi by the time of publication.

The Hanam data centre is located in the city’s Pungsan-dong neighborhood and spans 41,902 square metres (451,029 square feet) of gross floor area. JLL has been advising IGIS on the sale, according to local media reports, with market sources indicating to Mingtiandi that the property has been on the market since mid-2023.

“Seoul sees a Live Vacancy Rate of 3% that speaks to a pretty serious undersupply situation in the short to medium term,” DC Byte’s Ong said. “Prices have been rising as a result of this among other factors as well – overall, the market definitely hosts significant opportunities behind the challenges to market entry and supply delivery.”

Digital Infrastructure Devotee

Macquarie Asset Management has scored a series of wins in recent years through its data centre investments in Asia Pacific and globally.

In 2020 Macquarie-led consortium closed on an acquisition of an 88 percent stake in Australian hyperscaler AirTrunk, which valued the company at around $2 billion. The company is currently managing a sales process for AirTrunk said value the data centre operator at $9.9 billion.

In Macquarie acquired a minority stake in Virtus Data Centres, the UK digital infrastructure unit of Singapore’s ST Telemedia Global Data Centres.