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CapitaLand Investment (CLI) has recently acquired a freehold land parcel in Osaka, Japan for its first data centre development in the country. The total investment for the project is estimated to be over US$700 million or $944.3 million. The data centre is expected to have a power capacity of 50 megawatts (MW).
CLI has stated that the data centre will have the capability to support artificial intelligence (AI), and will incorporate energy-saving technologies, such as advanced cooling systems, to ensure efficient temperature management. The development will also use environmentally friendly products with zero ozone depletion potential and low global warming potential (GWP).
Manohar Khiatani, senior executive director of CLI, who oversees the group’s data centre business, believes that this acquisition aligns with the company’s digitalisation investment strategy and strengthens its presence in Japan, which is one of their focus markets.
Khiatani also highlights the potential for growth in the Japanese data centre market, with a projected compound annual growth rate (CAGR) of 10% from US$23.8 billion in 2023 to US$38.7 billion in 2038. He notes that Japan is the largest data centre market in Asia Pacific, outside of China, with a capacity of 1.4 gigawatts.
CLI is well-positioned to meet the demand for data centres in Osaka, with major cloud service providers already established in the area, including Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle. The group has raised US$600 million for its data centre development funds in Asia since October 2020 and plans to continue identifying investment opportunities for its private fund investors.
Michelle Lee, managing director of private funds (data centre) at CLI, expects strong demand for data centres to continue growing and surpassing new supply. With 97% of investors planning to increase their overall investment in data centres, there is significant institutional interest in this sector.
Overall, CLI has added 23 data centres to its global portfolio since 2021, bringing the total number of data centres under the CapitaLand Group to 27. These data centres, located across Asia and Europe, have a combined power capacity of approximately 800 MW and assets under management of around $6 billion.