CapitaLand to acquire Shanghai data centre campus for $748m

Property giant CapitaLand will invest 3.66 billion yuan (S$748.6 million) to acquire its first hyperscale data centre campus in China, the world's second-largest data centre market.

The potential acquisition is via the purchase of 100 per cent equity interest in two companies in China, the firm said yesterday.

The Shanghai campus, which serves two of China's largest telecoms companies, comprises four buildings with a gross floor area of up to 75,000 sq m and up to 55MW of IT power capacity, CapitaLand said.

It is looking to acquire the campus from an arm of Shanghai-listed Avic Capital and an unrelated third-party vendor.

It expects the acquisition to be completed by the third quarter, subject to certain conditions.

RHB analyst Vijay Natarajan believes CapitaLand may inject the campus into one of its private funds or real estate investment trusts (Reits).

"Generally, if the asset is mature with stabilised yields and fits within the mandate, it will be ideal for the Reit to acquire," he said.

He added that assets at the campus were not fully ramped up and enhancement work is needed.

CapitaLand has four data centres in Singapore, 11 in Europe and is the fund and asset manager for the development of a centre in South Korea.

The acquisition of the Chinese campus would bring the group's combined data centre portfolio to more than $2.5 billion in real estate assets under management.

Ms He Jihong, chief executive for data centre and chief corporate strategy officer at CapitaLand, said: "5G, artificial intelligence and big data are driving the growth of the digital economy and creating strong demand for data centres.

"(They) are a growing new-economy asset class and represent a global investment opportunity and a key strategic business focus for CapitaLand."

CapitaLand shares closed down 0.54 per cent at $3.72 yesterday.

THE BUSINESS TIMES