Singapore-based hyperscale specialist Empyrion DC plans to invest up to $400 million developing a green 40-megawatt data centre in Seoul’s Gangnam district, as it joins the growing squad of foreign firms crowding into South Korea’s digital infrastructure market.
The subsidiary of regional investor Seraya Partners said last week that it had entered into a binding agreement to buy 100 percent of the development rights for the 10-storey facility from an unnamed local firm in order seize the opportunity in what it sees as an underserved market.
“Leveraging our deep local networks in Seoul, we sourced this exclusive transaction that wasn’t available in the market,” said James Chern, chairman and managing partner of Seraya Partners. “As Seoul is running out of data centre supply, and as we plan to achieve ‘ready-for-service’ status in 2024, we already have customers requesting to lease entire floors.”
The project adds to a flurry of Singapore-headquartered firms undertaking new initiatives in Seoul’s data centre market this year, led by Digital Edge’s 120MW project announced in April and a 30MW development revealed by state-backed ST Telemedia Global Data Centres in June.
2024 Launch Eyed
Empyrion DC is said to already be at work lining up clients for the project in one of Seoul’s primary business districts, after having partnered with a unit of Malaysian conglomerate YTL Corp late last year to take on its debut facility in Singapore.
“We have received inbound interest from global hyperscale customers from the US and Asia and are in discussions with them,” a company representative told Mingtiandi on Wednesday, with transaction scheduled to be completed towards the end of September.
With its Singapore location slated to reach a capacity of 12.5MW Empyrion DC says it will invest in and build a combined capacity of at least 200 MW over the next three to five years, including a plan to develop the largest carrier neutral data centre in Taipei, according to its website.
Empyrion DC said it is also “in the process of developing” at least one data centre in Jakarta, without disclosing further details, with more projects lined up in Japan and Australia.
Dubbing the project GDC, the Singapore firm is working with architects and engineers to create the first green energy-powered server hosting facility in the city, including incoporating solar panels into the building facade.
With Singapore-based Seraya Partners investing mainly in new economy sectors like digital infrastructure and renewables, the operator said it will also use its own expertise in energy management to bring the carbon footprint down further.
Ex-Digital Realty Exec at Helm
The expansion comes shortly after the Singapore-based startup welcomed Digital Realty veteran Mark Fong as its chief executive earlier this month.
Fong brings with him 22 years of experience in the tech sector, including spending the past three years as a regional vice president leading Digital Realty’s Asia expansion and four years at Equinix as regional sales management director for Asia Pacific and Japan.
“My industry experience and capabilities will add extensive value to the Empyrion platform, supporting our goal to become a key player in Asia’s sustainable digital infrastructure industry,” Fong said. “We will bring global best practices from my experience at Digital Realty and Equinix to lead Empyrion to become successful and relevant locally in Asia Pacific.”
Korean Market Poised to Hit $5.8B
Empyrion DC said the 40MW facility should add rack supply to a Gangnam market hungry for more capacity after a decade-long drought in data centre development in the city, which is home to Korean tech conglomerates Hyundai, Kia, LG and Samsung.
Another Singapore-based operator expanding in the Seoul digital infrastructure market is Temasek Holdings-backed STT GDC, which in June announced its second Korean project through a partnership with Samsung SRA Asset Management and an unspecified global firm.
Startup Digital Edge said earlier this year that it would invest KRW 1 trillion ($1 billion) to build a 120MW facility near the capital city, positioned to be South Korea’s biggest once completed by 2024.
Estimated to be valued at $3.9 billion as of last year, South Korea’s data centre market is projected to be worth $5.8 billion by 2027 as it grows at an expected compound annual rate of 6.7 percent in the next five years, according to research published by Arizton Advisory and Intelligence in June.
Rising investment from global cloud service providers and broad adoption of artificial intelligence by the Korean government are seen as major growth drivers for the sector, with the capital serving as the primary focus of development projects.
“Until 2021, the demand for data center spaces has come from the cloud/IT sector, followed by large enterprises operating in the market,” Arizton said. “The investments in the South Korean data center market have skyrocketed in the last two years, till date, the supply has matched the demand, with an occupancy rate of around 80%.”