CapitaLand Investment (CLI) has recently acquired a freehold land parcel in Osaka, Japan for the development of its first data centre in the country. This significant investment will amount to over US$700 million or $944.3 million, with a secured capacity of 50 megawatts (MW) for the project.
According to CLI, the new data centre will be equipped with advanced technologies, including artificial intelligence (AI) capabilities, as well as energy-saving solutions and temperature management processes. In line with the group’s commitment to environmental sustainability, the data centre will also use products with minimal environmental impact.
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Manohar Khiatani, senior executive director of CLI, who oversees the group’s data centre business, emphasizes that the acquisition is aligned with the group’s digitalisation investment theme and will deepen its presence in Japan, one of its key focus markets.
Khiatani also notes that Japan is a Tier 1 data centre market, with a projected compound annual growth rate (CAGR) of 10% from 2023 to 2038. It is also the largest data centre market in Asia, excluding China, with a capacity of 1.4 gigawatts.
With major cloud service providers, such as Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle already operating in Osaka, CLI’s acquisition is strategically positioned to capture the growing demand in the city’s established data centre cluster.
Michelle Lee, managing director of private funds (data centre) at CLI, expects the demand for data centres to continue to increase, surpassing new supply. She also highlights strong institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in this sector.
Since October 2020, CLI has raised US$600 million for its data centre development funds in Asia. Lee affirms that the group will leverage this momentum to identify attractive investment opportunities for its private fund investors.
Adding 23 data centres to its global portfolio since 2021, CLI now boasts 27 data centres across Asia and Europe, with a completed capacity of around 800 MW and over $6 billion of assets under management. On Feb 3, shares in CLI closed 4 cents lower or 1.63% down at $2.42.