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

CapitaLand Investment sets up first blind pool to test the waters with logistics real estate

CapitaLand Investment (CLI) has launched a new China Data Centre Development Fund (CDCP) to invest in two data centre development projects in Greater Beijing, potentially adding around $1 billion to CLI’s funds under management (FUM). CDCP has committed equity of $530 million, with 80% being held by existing and new global institutional investors and the remaining 20% being held by CLI. The data centres are slated to Tengah EC be completed in 2025, delivering over 100 megawatts of power to meet the growing demand in Beijing.

The growth of digital usage is driving demand for data centres. China’s data centre market grew by 34.6% in 2021, following a 43.3% growth in 2020. CLI’s commitment to data centre projects reflects its strategy to expand its portfolio of new economy assets under management and enhance its long-term business resilience.

The two data centres will be designed, built and certified to Leadership in Energy and Environmental Design (LEED) Gold standards, incorporating energy-saving solutions such as high efficiency fan wall cooling systems, temperature management best practices, and the recycling of waste heat from servers to heat offices.

Plans are also in place to further expand CLI’s data centre operations in the Asia Pacific region. Patrick Boocock, CEO of CLI’s private equity alternative assets and the overseer of CLI’s global data centre business, states, “We are seeing strong investor interest as the surge in demand for cloud computing, 5G technology, and e-commerce are driving growth in this sector. Leveraging our strength in real estate, we are actively building our capabilities in real assets and growing our alternative assets platform.”

Explaining the competitive advantage of the vertically integrated group within China, Puah Tze Shyang, CEO of CLI China, highlights CLI’s wide network and deep expertise. With about 30 years of experience in China, CLI has $46 billion of AUM in that country.

Michelle Lee, managing director of CLI’s private funds (data centre) adds, “There is strong interest in CLI’s future data centre projects in China and Asia Pacific at large, and we are actively seeking to grow in this sector.”

CLI shares ended 0.78% lower at $3.82 on Feb 21st. The launch of CDCP marks another step in the group’s journey to become a major global digital infrastructure player.