Singapore-based Princeton Digital Group has fired the latest salvo in Asia’s intensifying data centre race, announcing plans to develop a 97-megawatt hyperscale campus near Tokyo at a total investment of $1 billion.
Japan becomes the fifth market for PDG — following China, Singapore, Indonesia and India — since the Warburg Pincus-backed company’s founding four years ago. The new investment, which comes as PDG is reported to be headed for an initial public offering, is part of the company’s mission to build a 600MW network across Asia.
Located 30 kilometres (18.6 miles) north of central Tokyo in Saitama City, the campus occupies a 33,047 square metre (355,715 square foot) site and will be developed in two phases of 48.5MW each, PDG said Tuesday in a release.
“The Asia Pacific region is set to be the largest data centre market in the world, and this announcement underscores our vision to be the market leader in this region,” said PDG co-founder, chairman and CEO Rangu Salgame.
PDG has secured the land and power for the Saitama campus, with construction to begin later this year. The operator describes the site as “nestled in a mature township” while still enjoying direct connectivity to the central business district and easy access to Tokyo and major airports through expressway routes and high-speed rail.
The facility will be built to the latest hyperscale design and standards, the company said.
According to a Structure Research analysis cited by PDG, Greater Tokyo’s hyperscale co-location market will reach $1.6 billion by 2025, increasing at a compound annual growth rate of 25.1 percent starting in 2021.
Property services firm JLL recently highlighted Japan as a data centre hotspot with a winning combination of strong demand and cheap financing.
“Our entry into Japan and, in particular, Tokyo demonstrates our continued ability to enter new markets that matter to our customers,” Salgame said.
PDG’s three-pronged strategy of acquisitions, carve-outs and greenfield development has enabled the operator to quickly expand its regional footprint to 19 data centres in five countries.
Bloomberg reported last week that PDG was considering raising funds from investors in a Warburg Pincus-arranged deal that could boost the company’s valuation to about $2 billion.
The potential $400 million capital raise would follow the $360 million financing round led by the Ontario Teachers’ Pension Plan last year and a $230 million debt refinancing secured from China Merchants Bank a few months ago.
Demand for server facilities from internet giants like Microsoft, Amazon, Alibaba and Tencent was a driving factor that led Salgame, formerly a divisional CEO with India’s Tata Group, to set up PDG with New York-based private equity firm Warburg Pincus in 2017.
“We saw a market need for a pan-Asian data centre operator,” he told MTD TV in an interview last October. “Internet companies were significantly scaling their investment in Asia and they were looking for the quality of services they were used to in Western markets.”