Singapore firms expand data centre investments overseas as demand grows

A general illustration of an ST Telemedia Global Data Centre.
A general illustration of an ST Telemedia Global Data Centre. PHOTO: ST TELEMEDIA GLOBAL DATA CENTRES

A Temasek-owned data centre provider based in Singapore plans to operate two new facilities in Tokyo, marking its first foray into the Japanese market.

ST Telemedia Global Data Centres will set up the complexes in Goodman Business Park, which is being developed in Inzai City in the Greater Tokyo area.

Goodman Japan will develop the data centres and lease the buildings on a long-term basis to ST Telemedia Global Data Centres. The first is expected to be ready in the second quarter of 2024.

Mr Nicholas Toh, the firm's chief executive for North-east Asia, said on Thursday (Oct 7): "These new... facilities are purpose-designed to meet the scalable capacity demands of... customers looking for large-scale facilities to meet growing requirements."

The move comes amid a string of partnerships and acquisitions in data centres by Singapore firms and real estate investment trusts this year.

A Fitch Ratings report on Monday (Oct 4) said "demand for data centres will continue to grow amid digital transformation and cloud-based solutions".

Last month, SingTel announced the partial sale of its Australian telecoms tower portfolio for A$1.9 billion (S$1.88 billion) to fund its expansion plans, which include data centres.

The telco said it has formed partnerships with Thai power producer Gulf Energy and integrated telecoms operator Telekomunikasi Indonesia to build and acquire data centres in those two countries.

Singtel chief executive Yuen Kuan Moon said the telco expects its data centre portfolio to grow "well above" $5 billion in assets under management across the region in the next three to five years.

CapitaLand is also investing in data centres. In April, it acquired a facility in Shanghai for 3.66 billion yuan (S$771 million).

The company said its plans to grow into a global business capitalise on "increasing global connectivity and demand for data which has accelerated amid Covid-19".

CapitaLand in July also announced its first data centre investment in India, where it will invest an estimated 12 billion rupees (S$218 million) to develop and operate phase one of a complex in Airoli, a growing data centre hub in Navi Mumbai, a planned city in the Konkan division of Maharashtra state.