Equinix already has 13 data centres in Japan including Tokyo’s TY10
GIC has set up a joint venture worth more than $1 billion with data centre provider Equinix to develop hyperscale server facilities in Japan, just nine months after the two parties established a separate $1 billion joint venture to build similar projects in Europe.
NASDAQ-listed Equinix, which has a network of 210 data centres globally, announced yesterday that it had signed a partnership agreement with the sovereign wealth fund to develop and operate large-scale facilities in Japan under its xScale brand.
The JV has been kicked off with an initial portfolio of three development projects – two in Tokyo and one in Osaka – which will serve a targeted group of Equinix’s existing hyperscale customers, and allow the likes of Alibaba, Google and Amazon to rev up their online offerings in Asia Pacific.
“These same cloud firms are evolving their platforms and are asking for larger deployments in certain markets – this is why we launched our second hyperscale initiative today,” Equinix’s president for Asia Pacific, Jeremy Deutsch, said in a blog post yesterday.
Scaling Up in Japan
Under the terms of the deal, which is expected to close in the second half of the year, GIC will contribute an unspecified amount of cash in return for an 80 percent stake in the joint venture, according to Equinix’s announcement.
Meanwhile, Equinix will transfer two under-development assets known as Tokyo TY12 and Osaka OS2, together with the development rights and land for an additional data centre in the Japanese capital, in return for a 20 percent equity interest in the joint venture and net cash proceeds of approximately £100 million.
Equinix’s Jeremy Deutsch said the JV with GIC targets cloud service providers like Google wanting to expand in APAC
“The new facilities under this JV will allow our hyperscale customers to streamline their continued growth, while strengthening Equinix’s leadership position in the cloud ecosystem,” said Charles Meyers, Equinix’s president and CEO.
When completed, the three initial facilities will provide 138 megawatts of power for the server banks of tech enterprises and e-commerce operators in the Osaka and Tokyo markets, giving tenants opportunities for greater interconnection and to bring their services closer to their customers, according to the company.
Equinix, which says it offers the most access points to the cloud of any provider globally, already operates 13 data centres in the country and has more than 500 staff on the ground.
Surging Demand for Hyperscale Facilities
GIC is making its bet on Equinix’ network of Japanese server farms sheds as recent information from cloud consulting firm Structure Research shows data centre demand outstripping supply in the world’s third largest economy.
”Through this new joint venture, Equinix and GIC will be a top provider of new data centre capacity for the world’s largest hyperscale companies seeking to expand in these two strategic markets – leveraging Equinix for both their core workload and interconnection requirements,” said Jabez Tan, head of research for Structure Research.
Tan added hyperscale providers such as IBM Cloud and Microsoft Azure are expanding in Asia Pacific as more companies in the region adopt hybrid strategies, which combine local and cloud resources, as well as multicloud approaches which replicate resources across online providers.
“Hybrid and multicloud have emerged as the clear IT architecture of choice, and Equinix is continuing its efforts to satisfy both the interconnection and core workload needs of the top hyperscale and cloud companies powering this infrastructure,” said Equinix’ Meyers.
GIC Learns to Love Servers
GIC’s return engagement with Equinix is the latest in a series of data centre investments by the sovereign wealth fund.
In August last year, GIC signed an agreement with mainland-based GDS Holdings to build and operate hyperscale data centres across China, with the JV set up to initially deliver build-to-suit data centres for a leading Internet and cloud service provider believed to be Alibaba.
One month before that deal, Aussie property group Lendlease set up a $1 billion joint venture with a global institutional investor, identified by a Mingtiandi source as GIC, to develop data centres in Asia Pacific.
APAC Data Centres Heating Up
For all of GIC’s server ardor, the $360 billion fund is one of many players racing to sign data centre deals in APAC, as cloud and IT services in the region are predicted to grow at a compound annual growth rate of 50 percent between now and 2022 — outpacing all regions globally, according to Equinix.
Just last week, Big Data Exchange, the data centre platform of Hong Kong internet provider HGC Global Communications, completed the acquisition of a server facility in Singapore as part of a A$160 million ($102 million) deal.
In December, GDS spent RMB 2.5 billion ($350 million) to add a Beijing data centre campus with a combined floor area of 19,700 square metres (212,049 square feet) to its mainland portfolio.
A month prior to that deal, Hong Kong-based private equity firm Gaw Capital Partners established a new joint venture with mainland data centre developer and operator Centrin Data to acquire, develop and operate hyperscale facilities in China.
Leave a Reply