ESR Group Limited has announced the first close of over 1 billion USD in equity commitments for its inaugural vehicle, Data Centre Fund 1 (DC Fund 1), that will be dedicated to the development of its data centre business.
The DC Fund 1 received commitments from several institutional investors, including sovereign wealth and pension funds. Beyond the main fund, ESR will also create a separate discretionary capital sleeve to co-invest into the fund.
The company expects that this capital sleeve could boost the vehicle to its hard cap of 1.5 billion USD. Additionally, the partners have an upsize option of an additional equity commitment of US$1.5 billion, that would bring the total investment capacity to as much as US$7.5 billion over time, the company said.
Significant Milestone for ESR’s Upscaling
According to researchers from CBRE, data consumption has grown by four times over the past five years in Asia, while direct investment in the Asia Pacific (APAC)’s data centre sector totalled 4.8 billion in 2021. As such, with the rapid surge in data consumption within APAC, there has been high investor interest in data centres within APAC.
Since ESR first moved into the data centre industry in 2021, ESR’s data centre portfolio now comprises data centre projects located in data centre clusters across Asia, including Hong Kong, Osaka, Tokyo, Seoul, Sydney, Mumbai, and Singapore, with a total delivery of 300 MW IT load.
ESR Data Centres CIO Devashish Gupta affirmed that “the APAC Data Centre fund is uniquely placed to take advantage of ESR Group’s adjacencies in land, power, fibre origination, a strong pipeline of recently acquired data centre-specific sites, a dedicated team of experienced data centre professionals, and partnerships with best-in-class data centre operators for co-location assets.”
Co-founders and co-CEOs of ESR, Jeffrey Shen and Stuart Gibson, said that “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.”
They added that “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.”
However, ESR also noted that the company had not forgotten its commitment to sustainability, even as it sought to expand its business.
According to Diarmid Massey, chief executive of ESR Data Centres, “the company’s ambition is also to offset high energy consumption by aligning its environment, social and governance strategy to convert some of its existing assets into large data centres and explore sustainable options through renewable energy generation from the rooftops.”
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