US data centre REIT Digital Realty continues to expand its Asia Pacific footprint, announcing Thursday that it had acquired a land parcel in Seoul to develop its second project in South Korea.
The world’s largest data centre trust plans to build a server-hosting facility, dubbed Digital Seoul 2, with up to 64 megawatts of critical IT capacity on the plot at Gurae-dong in northwest Seoul’s Gimpo City, Digital Realty said in a press release. The REIT paid $66 million for the 5 acre (2 hectare) land parcel, according to a filing this week with the US Securities and Exchange Commission.
The development site sits 23 kilometres (14.3 miles) from Digital Realty’s first Korean project, the 12MW Digital Seoul 1 within Sangam Digital Media City, as the Texas-based operator continues to build out its flagship PlatformDigital spanning 47 metro areas in 24 countries.
“South Korea is one of the world’s largest economies and represents a significant opportunity to extend coverage, capacity and connectivity options for the world’s leading enterprise customers and service providers,” said Digital Realty CEO Bill Stein. “Our continued investment in the country supports the delivery of carrier-neutral solutions to enable the digital transformation strategies of local and global customers in the region.”
Riding the Korean Wave
The carrier-neutral Digital Seoul 2 is under construction and scheduled for delivery in the fourth quarter of 2021. Once finished, the multi-storey structure will encompass 970,000 square feet (90,116 square metres) of space available for domestic and international firms to expand their digital capabilities across South Korea by the first half of 2023, Digital Realty said.
Mark Smith, Digital Realty’s managing director for APAC, hailed the country as one of the fastest-growing data centre markets in the region, driven by leading global service providers and local streaming and gaming companies.
“South Korea is a leading player on the global digital stage, and we expect the country’s new ‘Digital Deal’ investments in 5G, big data and artificial intelligence to drive greater demand for highly connected centres of data exchange,” Smith said.
The Moon Jae-in government announced in April that it would spend KRW 105 billion ($94 million) this year to support firms operating in promising new technologies, as part of a Korean New Deal scheme that aims to invest KRW 58.2 trillion and create 900,000 jobs by 2025.
Asian Network Grows
Digital Realty revealed its latest Korean investment less than two weeks after announcing a deal with Canadian asset management giant Brookfield to set up a joint venture to develop, own and operate data centres in India. The REIT’s Asia Pacific portfolio also includes two data centres in Hong Kong, three in Singapore and three in Japan.
Other data centre competitors making moves in South Korea include Digital Edge, the Singapore-based operator backed by New York’s Stonepeak Infrastructure Partners, which in April announced plans to invest $120 million in a pair of data centres in the country.
Last September, UK fund manager Actis set up a joint venture to develop its first server-hosting facility in South Korea, a $315 million facility in Greater Seoul to be built with its partner, Korean conglomerate GS Group.
In a March report on the most attractive places for building data centres, Dutch design consultancy Arcadis ranked South Korea 16th among all global markets.