ESR Group Limited has announced the first close of over US$1bn in equity commitments for Data Centre Fund 1, dedicated to the development of its growing data centre business.
In addition to the US$1bn already committed, ESR says it will raise a separate discretionary capital sleeve to co-invest in the fund, which it expects will boost the vehicle to its hard cap of US$1.5bn. Additionally, the partners have an upsize option of an additional equity commitment of US$1.5bn, that would bring the total investment capacity to as much as US$7.5bn over time.
Devashish Gupta, ESR Data Centres CIO, said: "The APAC Data Centre fund is uniquely placed to take advantage of ESR Group's adjacencies in land, power, fibre origination, strong pipeline of recently acquired data centre specific sites, a dedicated team of experienced Data Centres' professionals, and partnerships with best-in-class data centre operators for co-location assets."
Meeting the needs of data consumption
The rapid surge in data consumption, fuelled by continued growth in cloud computing and social media use, continues to drive investor interest in APAC data centres. Direct investment in the APAC data centre sector totalled US$4.8bn in 2021—more than double the previous high of US$2.2bn in 2020 and surpassing investment volumes for the past four years combined..
ESR's current data centre development portfolio comprises data centre projects primely located in major data centre clusters across Asia, including Hong Kong, Osaka, Tokyo, Seoul, Sydney, Mumbai and Singapore, delivering 300 megawatts IT load.
Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, said: "APAC is the prime market for data centre development and investment in the new era of digitalisation. The substantial first close of our inaugural data centre fund marks a significant milestone for ESR as we continue to grow and scale our digital infrastructure business. We thank our capital partners for their strong support to this exciting effort.
"As the largest New Economy real estate platform in APAC, we are looking to play into the critical need for digital infrastructure in a big way going forward by leveraging our core competitive advantages – our deep land sourcing capabilities, best-in-class design and construction capabilities, an integrated fund management platform as well as commitment to sustainability – with a singular focus to support our capital partners and customers to thrive and capitalise on the continued rise of the New Economy and digital transformation in APAC."
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