GIC chief executive Lim Chow Kiat
GIC has formed a joint venture with Brazilian asset manager Alianza to invest BRL 2 billion ($328.8 million) in data centres in the South American nation, as the Singapore sovereign giant continues its procession of intercontinental bets on digital infrastructure.
The JV will set up a fund focused on sale and leaseback and built-to-suit operations and pursue long-term contracts with hyperscale data centre operators, Alianza said Tuesday in a LinkedIn post. The first investments are in the advanced stages of negotiation and total 40 megawatts of capacity, the Sao Paulo-based firm said.
The Brazil play follows GIC’s investments in US and European server shed platforms during the last six months, with Knight Frank forecasting the global data centre market to grow at a compound annual rate of 18 percent to reach $4 trillion by 2030.
Alianza highlighted Brazil’s potential as a strategic hub for digital infrastructure, citing increased demand for cloud solutions, 5G and artificial intelligence in the country of 212 million people.
“We have space and an abundant supply of good quality, renewable energy, as well as good connectivity, thanks to the submarine cable structure,” Alianza partner Ricardo Madeira told local real estate journal Metro Quadrado.
Early Mover
Founded in 2011, Alianza has more than BRL 2.9 billion in assets under management. It was one of the first local fund managers to invest in data centres in Brazil, which has 595MW of inventory and is expected to add a further 220MW in 2025, according to CBRE data cited by Metro Quadrado.
Alianza partner Ricardo Madeira
GIC is testing the market after the December announcement that the $801 billion sovereign fund and Germany’s Munich Re Group would invest a combined €1.4 billion ($1.5 billion) into the Europe, Middle East and Africa platform of US hyperscale operator Vantage Data Centers.
Vantage’s EMEA portfolio includes 2.5 gigawatts of operational or under-development IT capacity. The commitments by GIC and the German reinsurer are meant to expand Vantage’s investor base and capital sources, enhancing the company’s ability to deliver high-quality, sustainable hyperscale data centre campuses to customers, the Denver-based group said.
In October, GIC revealed that it had formed a joint venture with the Canada Pension Plan Investment Board and server-hosting titan Equinix to develop data centre campuses in the US.
GIC and CPPIB each hold a 37.5 percent interest, with Equinix taking the remaining quarter stake in the JV, which aims to raise $15 billion to fund construction of hyperscale facilities providing more than 1.5GW of capacity. GIC had previously teamed up with NASDAQ-listed Equinix for data centre ventures in Japan and South Korea.
Global Market Stays Hot
The existing 45GW supply of global data centres represents an estimated $540 billion investment, according to Knight Frank’s latest data centre report, with the next two years of deployment expected to add a further $242 billion.
“Pricing has shown consistent double-digit growth,” said Alex Burgoyne, the consultancy’s global head of data centre valuations. “Initially fuelled by construction inflation — amidst the combination of supply chain disruptions, rising raw material costs and labour shortages — this will now be very much demand-led inflation going forward.”
Knight Frank predicts rental growth in 2025 to range from 10 to 15 percent for new data centre leases, while lease renewals could see greater increases of 20 percent or more. Capitalisation rates remained stable at 4.75 to 5.25 percent over the course of 2024, with potential for compression this year, according to the report.
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