Singapore’s GLP To Invest $13 Billion In Maiden Data Center Projects In Japan As Digital Economy Booms

Singapore-based real estate developer and asset manager GLP said Monday it will invest 1.5 trillion yen ($13 billion) to build its maiden portfolio of data centers in Japan’s biggest cities in the next few years to tap rising demand for such facilities that power e-commerce and other digital platforms.

“Our further expansion into data centers is a natural extension of our mission to provide critical infrastructure systems to support increasing digitalization in the new economy,” Yoshiyuki Chosa, president of GLP Japan, said in a statement. “With our investment and operating expertise, we believe we are well-positioned to build and scale a high-quality, full-service digital infrastructure platform to serve the growing needs in this market and serve the growing institutional investor demand for this asset class.”

GLP plans to develop data centers primarily in the greater Tokyo and Osaka regions, with a combined capacity of 900 megawatts (the scale of such facilities are defined by their power consumption). It has already secured land to build its first data center campus with a 600 megawatt capacity in the greater Tokyo area. Ground breaking for this project is expected next year, with the first building expected to be ready for service by 2024.

Backed by investors including Chinese billionaire Zhang Lei’s Hillhouse Capital, Bank of China, HOPU Logistics Investments and Vanke Real Estate, GLP is building data centers with a combined capacity of 2,500 megawatts across Asia and Europe. In China, the company’s pipeline of assets will have a combined capacity of 1,400 megawatts. It has also secured prime data center sites in Europe.

The rapid growth e-commerce, video conferencing and other digital platforms is spurring the growth of data centers across Asia Pacific. The market for data centers is expected to more than double to about $60 billion by 2027 from $26 billion in 2020, according to a study published by Research and Markets in August.

Other developers are stepping up investments in data centers, with Hong Kong-listed ESR Cayman developing facilities across the Asia Pacific region that will have a combined server capacity of about 250 megawatts and a gross asset value of over $10 billion in the next few years. Last month, Singapore’s sovereign wealth fund GIC and U.S.-based Equinix formed a $525 million joint venture to build a pair of hyperscale facilities in South Korea.

Originally founded by the group’s CEO Ming Zhi Mei and late American entrepreneur Jeffrey Schwartz (who died in 2014 at age 55) as Global Logistic Properties in 2007, the cofounders with the backing of GIC then bought a portfolio of logistics facilities in China from their former employer, U.S. warehouse developer Prologis, the following year. The company was listed on the Singapore stock exchange in 2010, before it was taken private in 2017. The business has since expanded to include other assets such as data centers and renewable energy infrastructure, with about $120 billion of real estate and private equity assets under management.