Real estate manager CapitaLand Investment is set to expand its data centre portfolio with the acquisition of freehold land to develop its first facility in Osaka, Japan.

The project represents an investment of more than $700m, with a total power capacity of 50MW also secured for the Osaka project.

Since 2021, CapitaLand Investment has added 23 data centres to its global portfolio.

The group now owns 27 data centres across Asia and Europe, with 800MW of power and assets under management worth $6bn on a completed basis.

CLI senior executive director Manohar Khiatani stated: “CLI’s data centre portfolio has expanded significantly over the last few years, and we are delighted to expand our footprint to Japan. The acquisition is not only aligned with CLI’s digitalisation investment theme but also enhances CLI’s geographical spread, deepening its presence in Japan, one of CLI’s focus markets.”

“CLI’s strong balance sheet gives us the distinct advantage to invest strategically in quality assets including data centres for our future private funds. Japan is a Tier 1 data centre market poised for tremendous growth. It is projected to expand at a compound annual growth rate of 10%, from $23.8bn in 2023 to $38.7bn in 2028.”

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“It is also Asia Pacific’s largest data centre market outside of China with a 1.4GW capacity, with both Tokyo and Osaka being key data centre hubs in the region. Major cloud service providers such as Amazon Web Services, Google Cloud, Microsoft Azure and Oracle already have a presence in Osaka. Our acquisition is hence well-positioned to capture demand in Osaka’s established data centre cluster.”

The company states that the Osaka data centre will be AI-ready and is designed with sustainability at its core, featuring advanced cooling technologies and energy-saving solutions.

It aims to achieve LEED certification or an equivalent Japanese green certification standard, utilising materials that minimise environmental impact, including those with zero ozone depletion potential and a GWP [global warming potential] of less than 100.

CapitaLand India Trust (CLINT) recently signed a long-term deal with a global hyperscaler, pre-leasing 50% of its 250MW capacity across four data centres under development in the Indian states of Mumbai, Chennai, Hyderabad and Bangalore.

The company has data centre investments in nine countries: China, France, India, Japan, the Netherlands, Singapore, South Korea, Switzerland and the UK.

CLI Private Funds (Data Centre) managing director Michelle Lee stated: “With the rapid adoption of digitalisation and AI globally and especially in Asia, data centre demand is expected to enjoy double-digit growth and outstrip new supply.”

“There is strong institutional interest in data centre investments, with 97% of investors planning to increase their overall investment in data centres. Leveraging CLI’s global network and on-ground expertise, we have secured this off-market opportunity in Osaka with 50MW of power.

“Since October 2020, CLI has successfully raised $600m for our data centre development funds in Asia. CLI continues to develop new data centre fund products. We will also build on our investment momentum and identify compelling investment pipeline opportunities for our private fund investors.”