Real estate investment company CapitaLand, has just acquired a hyperscale data center campus in China for RMB3.66 billion (approximately US$565 million), precisely located in Minhang District, Shanghai.

The hyperscale campus features four data center buildings with a gross floor area of about 75,000 square meters and offers up to 55MW of total IT power capacity. The campus which is operated by Chinese data center developer and operator Daily-Tech, currently serves two of the country’s largest telecommunications companies.

“CapitaLand’s entry into the data center market in China will further diversify our portfolio across asset classes and build more operating capabilities.  This is in line with the Group’s strategy to pivot into new economy assets in the country.  We see strong potential to expand our data center portfolio in cities such as Shanghai, Beijing, Shenzhen and leverage our growing base of new economy assets to bolster our fund management business in tandem,” said Mr Puah Tze Shyang, Chief Executive Officer, Investment and Portfolio Management, CapitaLand China.

CapitaLand is acquiring the data center campus from AVIC Trust, an investment arm of Shanghai-listed AVIC Capital, and from an unrelated third-party vendor. This acquisition further strengthens CapitaLand’s data center portfolio, currently having 4 data centers in Singapore, 11 in Europe which was acquired through its business space and industrial REIT Ascendas. CapitaLand is also the fund and asset manager for the development of a data center in Korea.

“Data centers are a growing new economy asset class and represent a global investment opportunity and a key strategic business focus for CapitaLand,” said Ms He Jihong, Chief Executive Officer, Data Centre and Chief Corporate Strategy Officer, CapitaLand Group.

“We have built core competencies in data center design, development and operations, and we will look to deploy our expertise to key markets as we grow our data center portfolio globally.  Our team has successfully redeveloped 9 Tai Seng Drive into a co-location data center in Singapore, and leased it to leading technology customers.”

The acquisition of this data center campus in China is expected to be completed in Q3 2021, subject to fulfilment of certain closing conditions. Furthermore, CapitaLand stated that it is considering India data center opportunities in partnership with Ascendas India Trust.