Malaysia's YTL Power acquires Singapore data centre, with plans to further scale up capacity in region

YTL Power acquired Dodid, which owns a 12.5 megawatt, Tier 3 data centre in Tagore Lane. PHOTO: DODID

SINGAPORE - Kuala Lumpur-based multi-utility group YTL Power International has acquired Singapore start-up Dodid, marking its first foray into the data centre industry outside Malaysia.

YTL Power International acquired Dodid - which owns a 12.5MW, Tier 3 data centre in Tagore Lane - through its digital infrastructure subsidiary YTL Data Center Holdings. It did not disclose the value of the deal in its announcement on Monday (Dec 20).

Data centres are physical facilities that are central to a company's information technology operations. Tier 3 data centres are the second-most reliable out of four tiers, and are typically used by larger enterprises.

YTL Power International described the acquisition as its first step towards establishing a "regional data centre platform".

Mr Yeoh Keong Hann, executive director of YTL Power International, noted that the group has been operating data centres in Malaysia and providing electricity to major data centre operators in Singapore through its electricity retailer Geneco.

"Singapore is a logical first step given the strategic synergies of our existing electricity businesses here and its place as a leading data centre hub in South-east Asia," said Mr Yeoh, adding that the region is undergoing rapid digitalisation.

"We are actively looking at more acquisitions and greenfield developments in this space, both in our home markets of Malaysia and Singapore, as well as other high growth markets such as Indonesia and Vietnam," he told The Straits Times on Tuesday (Dec 21).

YTL Data Center Holdings is also working with YTL PowerSeraya, one of Singapore's largest power producers, and Geneco on green energy solutions to enable the centre to run on renewable energy.

It plans to have 300MW of green data centre capacity in the region by 2030, mainly in Singapore, Kuala Lumpur and Johor.

YTL Group will expand its existing data centre facility in Sentul, Kuala Lumpur, to improve customers' connectivity to key Internet exchange hubs in central Kuala Lumpur.

YTL Data Center Holdings will also tap the group's expertise in renewable energy, telecommunications and construction to develop new data centre campuses in South-east Asia.

Mr Yeoh said that such campuses will be developed on existing YTL properties, as well as those of potential acquisitions or partners.

YTL Power International is not the only company eyeing a larger slice of the data centre pie here.

In June this year, American data centre giant Equinix bought a seven-storey data centre in Ayer Rajah Crescent for $125 million from Mapletree Industrial Trust, which developed the centre for the company in 2015.

Meanwhile, Digital Core Reit - a pure play data centre real estate investment trust (Reit) - debuted on the Singapore Exchange's mainboard this month. It raised nearly US$1 billion (S$1.36 billion) in the largest mainboard listing this year. It is sponsored by United States-based Digital Realty Trust, one of the largest owners and operators of data centres globally.

The Singapore Government said in February, however, that it has put a "temporary pause" on the release of state land for data centres and the development of such centres on existing state land, due to concerns about their sustainability.

"Data centres are intensive users of water and electricity. We need to manage the data centre ecosystem to ensure that it is environmentally sustainable, while supporting our business needs," said Education Minister Chan Chun Sing, when he was helming the Ministry of Trade and Industry. He added that the Government has been consulting the industry on how to enable sustainable growth.

Singapore data centre operators have also been expanding their footprint overseas.

Temasek-owned ST Telemedia Global Data Centres said in October that it plans to operate two new facilities in Tokyo - its first foray into the Japanese market. It will set up the complexes in Goodman Business Park in Inzai City in the Greater Tokyo area.

Meanwhile, Mapletree Industrial Trust acquired 29 data centres in the US for US$1.32 billion this year - a move that will likely make it one of the largest data centre owners among Reits listed in the Asia-Pacific.

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