KKR buys stake in Singtel's Asia data centre business

KKR will have the option to increase its holding to 25% by 2027 at the same valuation. Singtel, which established the business as part of its Digital InfraCo unit in June 2023, said it hoped to leverage KKR’s global expertise in data centres and critical telecoms infrastructure as adoption of artificial intelligence increases demand.

The private equity firm reached a first close of USD 6bn on its second Asia infrastructure fund last October; its first Asia fund for the asset class closed on USD 3.9bn in early 2021. Both funds have been touted as the largest of their kind.

KKR has approached the data centre space through various angles. Earlier this year in North America, it acquired data centre cooling systems provider CoolIT Systems via its global impact strategy. In Europe in 2020, it launched a USD 1bn data centre roll-up platform called Global Technical Realty, backed in part by its third global infrastructure fund.

The latest transaction marks the first collaboration between KKR and Singtel. The proceeds will be used to expand across Southeast Asia, with Singapore, Thailand, and Malaysia specified as markets of interest. Digital InfraCo has 62 megawatts of existing capacity in Singapore.

The plan is to build another 58 MW project in Singapore while leveraging partnerships with Indonesia’s Telkom and Medco Power as well as Thailand’s GULF and AIS to develop data centres in Batam and Bangkok, respectively. The portfolio is planned to have a combined capacity of more than 155 MW once the three new projects are operational in 2025, with room to scale up to more than 200 MW.

“Robust digital infrastructure, including high-quality data centres, will play a crucial role in enabling Southeast Asia’s flourishing digital economy, and Singapore is well-placed to serve as a central hub for the region,” David Luboff, a partner and head of Asia Pacific infrastructure at KKR, said in a statement.

KKR noted that Southeast Asia’s data centre market is expected to grow by 17% over the next five years compared to 12% for the rest of the world, with up to USD 13bn in investments projected to flow into the region. It flagged Malaysia, Indonesia, and Thailand as potentially the fastest-growing markets.

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• Topics
• Southeast Asia
• Infrastructure
• Technology
• Expansion
• Singapore
• KKR
• Singtel
• data center