GIC backs $1b Japan data center rollout

The assets will be 80% owned by GIC and 20% owned by Equinix. The plan, expected to clear regulatory approval in the second half of 2020, is to initially develop three facilities across Tokyo and Osaka with a view to supporting local demand for hyperscale cloud infrastructure.  

Data centers are referred to as hyperscale facilities where there is a strong focus on maintaining the flexibility to increase capacity as demand rises. This segment is seen as rapidly growing due to the increased capacity requirements of cloud service providers (CSP) such as Alibaba Cloud, Amazon Web Services, Microsoft Azure, and Google Cloud, all of which are users of Equinix's existing 13-facility data center footprint in Japan.  

"This significant investment by Equinix and GIC in the region's cloud market underscores the growing pace of hyperscale CSP expansion across Asia Pacific and how the cloud is fueling digital transformation in every industry," Jeremy Deutsch, Equinix's president for Asia Pacific, said in a statement. "In 2019, we demonstrated notable momentum in Asia Pacific, especially from sales in the region's growing online gaming, publishing, and e-commerce sectors, as hyperscale cloud platforms continue to power these vertical markets."

GIC agreed to a similar plan last year when it partnered with specialist developer GDS Holdings to construct a suite of supercomputing data centers across China under undisclosed financial terms. The scheme will see GDS retain 100% ownership of construction projects until completion, at which point GIC will acquire a 90% interest. GDS is an investee of SBCVC, a Chinese venture capital arm of SoftBank, and an experienced data center player in China. It will act as operator of the GIC-owned assets. 

Data infrastructure assets are said to benefit from a more flexible and scalable development profile than traditional infrastructure, with even bulky assets such as data centers able to modularly expand through networked locations that ensure consistent connectivity and increased computing capacity. Earlier this month, a Macquarie Infrastructure & Real Assets-led consortium pursued this theme by acquiring hyperscale data center operator AirTrunk for about $2 billion with plans to expand operations across Asia Pacific.

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• Topics
• Greater China
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• China
• GIC Private
• data center