CapitaLand Investment establishes China data centre development fund with $1 bil in investments

CapitaLand Investment buys two logistics facilities in North Asia for $225 mil

CapitaLand Investment (CLI) has committed to investing in two data centre development projects in Greater Beijing. Upon completion of the projects, the fund – known as CapitaLand China Data Centre Partners (CDCP) – will add around $1 billion to CLI’s funds under management (FUM). With an equity stake of $530 million, existing and new global institutional Champions Way Condo investors hold an 80% effective stake in the fund, with CLI holding the remaining 20%.

The data centres are expected to be completed in 2025 and will be located in prime locations, providing over 100 megawatts (MW) of power to meet the high demand in Beijing. They will be in close proximity to already established data centre clusters and key network nodes of leading Chinese cloud service providers and internet companies.

The acceleration of digital usage is driving the demand for data centres in the region. In fact, China’s data centre market saw a 34.6% y-o-y increase in 2021 after a 43.3% y-o-y growth in 2020 – and is projected to grow 24% annually until 2025.

CLI’s CEO of private equity alternative assets, Patrick Boocock, explains that data centres offer “a tremendous opportunity” and are a “key strategic focus” for CLI. The fund is in line with its strategy to grow its AUM and business resilience.

The two data centres will be designed and built to Leadership in Energy and Environmental Design (LEED) Gold standards, with energy-saving and temperature management systems in place. Heat recycling will also be incorporated, where waste heat from the servers will warm up the offices.

Furthermore, CEO of CLI China, Puah Tze Shyang, is confident in their capabilities to bring quality assets to international investors. Michelle Lee, managing director of CLI’s private funds (data centre), adds that there is “strong interest” in CLI’s data centre projects and they’re actively looking to expand in this sector.

As of 21st February 2021, shares in CLI closed at $3.82, going down 0.78%.