Real estate private equity firm Gaw Capital Partners has formed a JV platform jointly with A3 Capital to invest into greenfield and under-performing data center assets across key markets in the Southeast Asia region.
The collaboration is aimed to create a portfolio of Tier-3 certified data center assets, the company said in a statement. This JV platform will also launch the Infinaxis Data center platform with a focus on developing Internet Data center (IDC) assets across the Southeast Asia region, it added.
The data center assets under the JV platform will be managed by Infinaxis, staffed by an experienced data center team originally under A3 Capital. The JV platform’s first investment is located in Cyberjaya, Kuala Lumpur, Malaysia, with other pipeline opportunities in other neighboring countries like Indonesia and Singapore. Kok Chye Ong the Managing Director and Head of IDC Platform, Asia (Ex-China) of Gaw Capital Partners said:
“Gaw Capital Partners is honored to work together with Infinaxis Data center Holdings as the platform operator. By forming this strong partnership, we will develop, acquire or reposition four to five data centers in different locations throughout Southeast Asia. The data center demand in Malaysia is underpinned by strong internet traffic and high amount of data consumption. In recent years, the internet data growth in these areas have been further accelerated by the continued digital transformation of enterprises and 5G penetration. Also, several government initiatives over the last decade have made Malaysia an attractive market for data centers. However, the supply of quality data centers has not caught up with the technical demand from customers. We look forward to exploring more investment opportunities in this market.”
Cyberjaya is one of the largest IDC hubs in Malaysia, housing 67 per cent of the Multi-Tenant Data center market in Malaysia as of Q2 2021. Considered as the “Silicon Valley of Malaysia”, Cyberjaya, spanning around 29 square kilometers, is the nucleus of the Multimedia Super Corridor in Malaysia.
Cyberjaya houses over 2,000 businesses, including SMEs, startups and multinational companies such as IBM, Fujitsu, Panasonic and Huawei, as well as seven universities, turning it into a regional and global ICT hub. Zahri Mirza, Chief Executive Officer (CEO) for Infinaxis further added:
“The outlook for data center demand in Southeast Asia is indeed highly positive and our collaboration with Gaw Capital will allow us to fast track the delivery of services for our customers. Indeed, through our Gaw Capital partnership we have been able to gain support from MIDA and MDEC in processing the necessary regulatory approvals in a timely manner.”
Located in Cyberjaya, the seed investment consists of two greenfield sites with a combined plot area of 12,490 square meters. The JV platform will develop a 12 MW IT load IDC facility on one of the plots. The IT capacity will potentially be doubled in the future, with the second plot to be developed as an expansion site. The data center assets under the JV platform will be operated by Infinaxis, which consists of seasoned industry experts with decades long track records in data center, real estate and technology industries.
The Malaysian Investment Development Authority (MIDA) and Malaysia Digital Economy Corporation (MDEC) welcome the JV partnership formed by Gaw Capital Partners and A3 Capital to launch the Infinaxis Data center platform, enhancing digital infrastructure in Malaysia.
Datuk Wira Arham Abdul Rahman, CEO of MIDA said: “Malaysia is the location of choice for industry leaders to site their best-in-class data centers. These combined efforts will definitely play a key role in enhancing our digital infrastructure.”
“The Government is committed to growing Malaysia as a data center hub by developing infrastructure, facilitating innovation and strengthening frameworks guided by the MyDigital Blueprint and National Investment Policy (NIP). Anchored by the National Investment Aspirations (NIA), the NIP will outline practical strategies to prioritise nurturing innovative, high-impact, high-tech investments that create high value jobs,” added Datuk Wira Arham.
Ts. Mahadhir Aziz, CEO of MDEC, said, “As the nation’s lead digital economy agency, we are pleased to have facilitated this expansion in raising the overall infrastructure capacities in the data center sector. This will be crucial as we seek to continue accelerating the growth of our digital economy, guided by the new national strategic initiative, Malaysia Digital (MD). MDEC will strive to form more effective collaborations and drive further facilitation on this front to ensure that the nation remains competitive and attractive to investments, towards establishing Malaysia as the digital hub of ASEAN.”
The JV platform is committed to incorporating ESG principles. Infinaxis plans to apply a staged implementation of more advanced sustainability features over time, considering the availability of options and unique circumstances at the respective sites. The data centers will be more efficient and sustainable, fundamentally making them more competitive which will increase the platform’s long-term value.
In recent years, IDC has been a focus sector for Gaw Capital Partners as the data center industry is one of the cornerstones of the digital economy. The firm was also highlighted for launching two data center platforms in China and two in Pan-Asia. In September 2020, the firm closed fundraising for its first IDC platform, which invested in a portfolio of projects in partnership with IDC developers and operators in China, bringing the total equity raised to approximately USD1.3 billion with the aim to build “green, efficient, innovative and recyclable” data center clusters.
The Asia region represents as one of the geographic frontiers in the data center space with greater opportunities. The Gaw Capital data center platform will also comprise data centers located in China, Indonesia, Japan, South Korea, Vietnam and now in Malaysia.
Apart from Malaysia, recently Gaw Capital Partners acquired greenfield land located in Saigon Hi-Tech Park, one of the key high-tech focused business parks in Ho Chi Minh City, Vietnam. This land will be further developed into a carrier neutral Tier III Data Center, which will act as the seed investment of Gaw Capital’s Pan-Asia IDC platform.
In Malaysia, Gaw Capital competes with the likes of AirTrunk, Bridge Data Centres, Equinix and others.