CapitaLand Investment Limited (CLI), a Singapore-based global real asset manager, has acquired a freehold land parcel in Osaka to develop its first data center in Japan which will entail a total investment of more than $700 million.

CLI said in a statement on Tuesday that 50 megawatts (MW) of power capacity have been secured for the project.

The acquisition is a testament to CLI’s strong global multi-asset class network and deal sourcing capability.

The data center in Osaka will be artificial intelligence (AI)-ready and feature state-of-the-art design with sustainability at its core.

It will be designed, built, and certified in accordance with Leadership in Energy and Environmental Design (LEED) or an equivalent Japanese green-certification standard.

The facility will integrate energy-saving solutions such as advanced cooling technologies and adopt industry best practices in temperature management to enhance energy and water usage efficiency.

Furthermore, the data center will utilize products with zero ozone depletion potential or with global warming potential (GWP) of less than 100 to minimize environmental impact.

With this latest plan, CLI has added 23 data centers to its global portfolio since 2021.

CapitaLand Group has 27 data centers across Asia and Europe with about 800 MW of power and around S$6 billion ($4.41 billion) of assets under management on a completed basis.

“CLI’s data center portfolio has expanded significantly over the last few years and we are delighted to expand our footprint to Japan,

“The acquisition is not only aligned with CLI’s digitalization investment theme but also enhances CLI’s geographical spread, deepening its presence in Japan, one of CLI’s focus markets,” said Manohar Khiatani, Senior Executive Director of CLI, who oversees the group’s data center business.

According to him, CLI’s strong balance sheet gives the firm the distinct advantage to invest strategically in quality assets including data centers for our future private funds.

He highlighted that Japan is a Tier 1 data center market poised for tremendous growth.

“It is projected to expand at a compound annual growth rate of 10 percent, from $23.8 billion in 2023 to $38.7 billion in 2028,” he said.

He noted that Japan is also Asia Pacific’s largest data center market outside of China with a 1.4 gigawatt capacity, with both Tokyo and Osaka being key data center hubs
in the region.

“Major cloud service providers such as Amazon Web Services, Google Cloud, Microsoft Azure and Oracle already have a presence in Osaka,

“Our acquisition is hence well positioned to capture demand in Osaka’s established data center cluster,” he added.

Michelle Lee, Managing Director, Private Funds (Data Centre) of CLI, said that with the rapid adoption of digitalisation and artificial intelligence (AI) globally and especially in Asia, data center demand is expected to enjoy double-digit growth and outstrip new supply.

“There is strong institutional interest in data center investments, with 97 percent of investors planning to increase their overall investment in data centers,

“Leveraging CLI’s global network and on-ground expertise, we have secured this off-market opportunity in Osaka with 50 MW of power,” she said.

She also noted that since October 2020, CLI has successfully raised about $600 million for its data center development funds in Asia.

“CLI continues to develop new data center fund products,

“We will also build on our investment momentum and identify compelling investment pipeline opportunities for our private fund investors,” she added.

According to the statement, the data center in Osaka is a testament to CLI’s experience in investing, designing, developing and operating data centers.

Combined with CLI’s deep market knowledge, deal sourcing expertise, and global investment network, CLI’s vertically-integrated data center capabilities enable it to partner with investors to tap into the wealth of opportunities in the sector.

CapitaLand India Trust (CLINT) earlier signed a long-term agreement with a leading global hyperscaler for its data centers under development in India.

With the agreement, CLINT is likely to pre-lease about half of its total gross power capacity of around 250 MW across its four data centers which are under development in India.

CLINT is developing state-of-the-art facilities in all the key data center corridors of India, i.e., Mumbai, Chennai, Hyderabad and Bangalore.

CapitaLand Group has data center investments across nine countries such as Singapore, Japan, South Korea, India, China, the United Kingdom, France, the Netherlands, and
Switzerland.

Headquartered and listed in Singapore in 2021, CLI had S$134 billion ($98.42 billion) of assets under management, as well as S$102 billion ($74.91 billion) of funds under management held via six listed real estate investment trusts and business trusts and a suite of private real asset vehicles that invest in thematic and tactical strategies as at 30 September 2024.

Its diversified real estate asset classes include retail, office, lodging, industrial, logistics, business parks, wellness, self-storage, data centers, private credit and special opportunities.

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