23 July 2020

Keppel expands into the fast-growing data centre market in China

  • Alpha Data Centre Fund will invest approximately RMB 1.5 billion to acquire and develop a high specification data centre in Huizhou’s Tonghu Smart City
  • Keppel Data Centre will work with Chinese partners and contribute its expertise in data centre development, as well as operations

Alpha Data Centre Fund (Alpha DC Fund), through its wholly-owned subsidiary, has entered into an agreement to acquire 100% shareholding interest in Huizhou Bike Property Co Limited, (Huizhou Bike), which is a fully-owned subsidiary of Country Garden Holdings Co., Ltd. (Country Garden). Huizhou Bike will own a greenfield data centre development strategically located in the Tonghu Smart City in Huizhou, Guangdong Province, China.

Alpha DC Fund, which is managed by Alpha Investment Partners Limited (Alpha), will invest approximately RMB 1.5 billion to acquire Huizhou Bike and to develop the data centre. Country Garden, one of China’s leading property developers, will leverage the rich technical capabilities and experience of Keppel Data Centres and undertake the construction of the core and shell of the data centre.

In addition, Keppel Data Centres will also collaborate with local data centre operator, Shenzhen Huateng Smart Technology Co, Ltd (Huateng Co.), to implement global best practices for data centre operations in this data centre.

When fully developed, the data centre in Huizhou will fit more than 6,000 high-density racks and have China Data Centre Class A GB-standard equivalent specifications. With an expected gross floor area (GFA) of 486,700 sq ft, the data centre will be developed in two phases, with completion expected in 2021 and 2022 respectively. In addition, the data centre site also has the potential to build up another 538,200sq ft to its GFA, which would bring the total GFA to approximately 1,024,900 sq ft.

Mr Alvin Mah, CEO of Alpha, said, “Demand for quality data centres has been increasing rapidly with the expansion of the digital economy globally. Alpha DC Fund is pleased to be able to capitalise on such growth in the Asia Pacific region through our investment in this project, which will be the Fund’s first asset in China. This investment will provide further diversification to the Fund’s portfolio, and enhance the risk-adjusted returns for our investors.  The collaboration with Keppel Data Centres bears testament to how the different business units in the Keppel Group are working closely together to offer our investors quality investments and solutions.”

Mr Wong Wai Meng, CEO of Keppel Data Centres, said, “Keppel Data Centres’ collaboration with Country Garden, and local data centre operator, Huateng Co., will allow us to strengthen our local network and know-how. Coupled with our extensive experience in developing and operating data centres globally, this collaboration will allow us to deliver a safe, reliable and high specification data centre facility for customers in the Greater Bay Area. The project will also contribute to the upgrading of information infrastructure and economic development in Huizhou.”

China is pushing ahead in its New Infrastructure campaign, which focuses on information-based, converged and innovative infrastructure. China expects a total of more than US$3.78 trillion in new infrastructure construction and related investments over the next five years, according to Haitong Securities1. In a recent publication by Guangdong Province detailing its 2021-2025 plans for 5G base stations and data centres, Huizhou was listed as one of its six key cities for super and large-scale data centre developments.

Located in Huizhou, in close proximity to Guangzhou, Shenzhen and Dongguan, this upcoming data centre is strategically aligned with the Chinese government’s drive for New Infrastructure projects in the Greater Bay Area, and will add to the vibrancy of the Guangzhou-Shenzhen-Hong Kong-Macao Science & Technology Innovation Corridor.

The above transaction is not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.

 

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1 Data Economy, “China Is About To Go On A $3.8tr Digital Infrastructure Investment Spree”, 28 May 2020

(data-economy.com/china-is-about-to-go-on-a-3-8tr-digital-infrastructure-investment-spree/)

 

 

About Alpha Investment Partners

Alpha Investment Partners (Alpha) is a wholly-owned subsidiary of Keppel Capital, a premier asset manager in Asia and the asset management arm of Keppel Corporation Limited.

Alpha has been adding value for investors by constantly seeking innovative solutions throughout its investment process since 2004.

Alpha has an institutional investor base comprising renowned pension plans, financial institutions, fund of funds, insurance companies, endowments and family offices spanning Europe, North America, Asia and the Middle East.

Its private funds are invested in different asset classes including real estate and data centres, and across the risk spectrum in the core, core-plus, value-add and opportunistic space. Each fund has a specific strategy to leverage prevailing opportunities, as well as seek a blend of income and capital returns according to its risk profile. Alpha also manages the Alpha Real Estate Securities Fund, an open-ended fund that invests in listed REITs and real estate securities predominantly in Asia. 

About Keppel Data Centres

Keppel Data Centres Holding (Keppel Data Centres) is a 70-30 joint venture between Keppel Telecommunications & Transportation (Keppel T&T) and Keppel Land, both subsidiaries of Keppel Corporation, a multi-business company providing solutions for sustainable urbanisation, to meet the growing need for energy, infrastructure, clean environments, high quality homes and offices, and connectivity.

Keppel Data Centres has a track record of more than a decade in owning, developing and managing high-quality carrier-neutral data centre facilities that support mission-critical computer systems. Strongly committed to environmentally sustainable business practices, Keppel Data Centres offers a comprehensive range of wholesale, build-to-suit and colocation solutions built to the highest industry standards.

Keppel T&T is also the sponsor of Keppel DC REIT, the first data centre Real Estate Investment Trust (REIT) listed in Asia and on the SGX-ST. Keppel Data Centres, together with other members of Keppel Group, owns and operates a global portfolio of more than 20 data centres located in key data centre hubs across Asia Pacific and Europe.

For more information on Keppel Data Centres, please visit www.keppeldatacentres.com