Vantage Set to Buy Yondr Malaysia Data Centre Campus for $1.6B After Oracle Lease

A pair of digital infrastructure companies backed by US private equity firm DigitalBridge are close to signing a landmark trade of a Malaysian data centre thanks to the growing needs of tech giant Oracle, according to industry sources who spoke with Mingtiandi.

Vantage Data Centers is in advanced talks to purchase a Johor Bahru data centre campus from Yondr Group for $1.6 billion, the sources said, with the deal coming just three months after Yondr handed over the first 24MW phase of the project to Oracle. The deal discussions were first reported by Bloomberg.

Neither Vantage nor Yondr had replied to inquiries from Mingtiandi by the time of publication, with Industry analysts framing the deal as a step forward for Vantage, after the Denver-based player entered Asia Pacific through a pair of 2021 acquisitions. Formerly known as Colony Capital, NYSE-listed DigitalBridge teamed up with Quebec pension fund manager La Caisse to acquire Yondr in a $5.8 billion deal which closed on 1 July. A fund managed by Digital Bridge acquired Vantage in 2017.

“We think the acquisition marks a strategic step for Vantage, adding a desirable asset anchored by a major customer,” said Jingwen Ong, APAC research manager with industry data provider DC Byte. “With one of the largest colocation leasing transactions in the subregion already secured on favourable terms, the deal is expected to reinforce investor confidence while broadening Vantage’s portfolio and advancing its expansion in Southeast Asia.”

Singapore sovereign fund GIC and the UAE’s Abu Dhabi Investment Authority are said to be investing in the acquisition alongside Vantage. Neither organisation had responded to inquiries from Mingtiandi by the time of publication.

300MW Campus Near Singapore Border

Should the deal be consummated, it would add Yondr’s 300MW campus  in Johor’s Sedenak Tech Park to a Vantage APAC portfolio which currently includes 647MW of live and planned IT capacity across eight projects. In a December statement, Yondr said the Johor project would be Southeast Asia’s largest data centre campus when completed.

Oracle is understood to have leased the first 98MW data centre in Yondr’s Johor project for a period of 15 years, on a deal which includes an annual 2 percent escalation clause. 

Yondr handed over the initial phase of the project six months ahead of schedule as its first operational facility in APAC, according to a company statement, while a timeline for delivering the remaining 73MW portion of the facility has yet to be made public. The 300MW campus occupies a 72.5 acre (29.3 hectare) site which is powered by its own 275kV substation and is located just under 60 kilometres (37 miles) from the Singapore border.

In addition to its Johor project, Yondr in February last year announced plans for a Tokyo data centre through a partnership with Japan’s Marubeni Corporation and the company’s website also lists a Jakarta project, without providing additional details. 

Cloud Players Expand in Malaysia

Yondr’s deal with Oracle coincides with the US tech titan announcing in October last year that it would invest more than $6.5 billion in AI and cloud computing in Malaysia, including setting up a dedicated region for the country under its cloud services umbrella.

Google has also set up a dedicated cloud region for the Southeast Asian nation and has teamed with local developer Sime Darby Property to develop data centres in Selangor state, north of Kuala Lumpur.

Microsoft spent $85 million last year to buy a Johor data centre site from local developer EcoWorld and more recently has been piecing together plots in the southern Malaysian state’s Nusa Cemerlang Industrial Park. Amazon’s AWS infrastructure division launched a Malaysia cloud region in August of last year. 

Vantage Expands in APAC

DigitalBridge entered Asia Pacific in 2021 with a deal to acquire the data centre business of Hong Kong telecom operator PCCW for $750 million, according to statements to the HKEX at the time. That deal gave the company 75MW of Hong Kong capacity across nine local projects. 

The company signalled its larger plans for Asia Pacific in October last year when it hired Jeremy Deutsch as its president for the region, after the Equinix veteran had spent 23 years at the world’s largest data centre operator including working as president of Asia Pacific for the NASDAQ-listed firm since 2019.

Three of those projects representing 32MW of capacity are now part of Vantage’s portfolio, after DigitalBridge said two months after the Hong Kong deal that it was putting its APAC data centre holdings under Vantage. That deal came after Colony Capital in 2020 set up Singapore-based Agile Data Centers with the company later folding that firm’s plans for projects in Tokyo, Osaka and Melbourne into Vantage.

On its website, Vantage currently lists projects in Melbourne, Hong Kong, Osaka and Taipei, along with two facilities in Malaysia’s Cyberjaya area, near Kuala Lumpur, including a planned 436MW campus.