[ecis2016.org] Anchor investors for the fund include some of the world’s largest sovereign wealth and pension funds.
ESR Group Limited on July 26, 2022, announced the first close of over $1 billion in equity commitments for its inaugural vehicle, Data Centre Fund 1. The fund by APAC’s largest real asset manager and the third-largest listed real estate investment manager globally is dedicated to the development of its growing data centre business.
ESR DC Fund 1 brings together some of the world’s largest institutional investors, including sovereign wealth and pension funds.
ESR will raise a separate discretionary capital sleeve to co-invest into the fund which will likely close the balance of the fund at the hard cap of $1.5 billion. Additionally, the partners have an upsize option of an additional equity commitment of $1.5 billion that would bring the total investment capacity to as much as $7.5 billion over time.
ESR’s current data centre development portfolio comprises data centre projects primarily located in major data centre clusters across Asia, including Hong Kong, Osaka, Tokyo, Seoul, Sydney, Mumbai and Singapore, delivering 300 megawatts IT load. Among these projects is a key asset the group acquired in Osaka that will be developed into a multi-phase data centre campus, with a development potential of up to 95 MW IT load to serve both hyperscalers and co-location operators in the rapidly growing Osaka market.
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.”
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, with investment in the sector soaring to record levels in 20211. Data consumption has grown by four times over the past five years in Asia, while direct investment in the APAC data centre sector totalled $4.8 billion in 2021—more than double the previous high of $2.2 billion in 2020 and surpassing investment volumes for the past four years combined.
Diarmid Massey, ESR Data Centres CEO, highlighted: “With nearly $60 billion of New Economy AUM, digital infrastructure is a key strategic focus for ESR Group. Naturally, our ambition is to offset high energy consumption by aligning with our ESG strategy to refurbish, re-develop, convert some of our existing 39.8 million sqm GFA of assets into large and edge data centres, and to explore sustainable options through actual renewable energy generation from the rooftops.”
The completion of the transaction is subject to relevant regulatory approvals.
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