CapitaLand Investment (CLI) has recently made a major acquisition in Osaka, Japan, purchasing a freehold land parcel for the development of its first data centre in the country. The project, which will require an investment of over US$700 million or $944.3 million, will secure a power capacity of 50 megawatts (MW).
CLI has stated that the data centre will be equipped to support artificial intelligence (AI) capabilities. In order to enhance energy efficiency, the data centre will utilize advanced cooling technologies and adhere to industry best practices for temperature management. Additionally, the centre will utilize environmentally-friendly products with zero ozone depletion potential or a global warming potential (GWP) of less than 100.
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Senior Executive Director of CLI, Manohar Khiatani, who is responsible for overseeing the group’s data centre business, views this acquisition as a strategic move in line with the group’s digitalization investment theme. The purchase also serves to expand CLI’s geographical reach and strengthen its presence in Japan, one of the group’s key focus markets.
Khiatani notes that Japan is considered a Tier 1 data centre market with significant potential for growth. The country is projected to see a compound annual growth rate of 10%, growing from US$23.8 billion in 2023 to US$38.7 billion in 2038. Japan is also the largest data centre market in Asia Pacific, second only to China, with a capacity of 1.4 gigawatts.
CLI’s acquisition is well-positioned to tap into the demand within Osaka’s established data centre cluster, as major cloud service providers like Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle are already present in the region. Managing Director of Private Funds (Data Centre) at CLI, Michelle Lee, highlights the strong institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in the sector.
Given the rising demand for data centres, Lee anticipates double-digit growth and a potential shortage of new supply. She also reveals that CLI has raised US$600 million for its data centre development funds in Asia since October 2020, and will continue to actively seek out investment opportunities for its private fund investors.
With this recent acquisition, CLI now has a total of 23 data centres in its global portfolio. The CapitaLand Group, under which CLI falls, currently has 27 data centres across Asia and Europe with a total power capacity of 800 MW and assets under management of $6 billion.
On Feb 3, shares in CLI closed at $2.42, a decrease of 1.63%.