Keppel’s second data center fund closes more than $500 million

Singapore-based Keppel Capital Holdings has launched its second data center fund for investments in Asia and Europe.

With a target investment size of $1 billion, the Keppel Data Center (KDC) Fund II has already raised initial capital investments of more than $500 million.

KDC Fund II will be managed by its subsidiary Alpha Investment Partners who will leverage the expertise of Keppel Data Centres to capture investment opportunities in greenfield and brownfield data centre assets.

Sustainability at the core of everything

Alvin Mah, CEO of Alpha Investment Partners, says that the fund will leverage Keppel’s expertise on sustainable technology, and energy efficiency to develop greener data centers.

“The COVID-19 pandemic has accelerated the pace of digitalisation for many businesses and governments alike and further spurred the growth of the data center sector,” said Mr. Mah. 

This will be in line with Keppel’s Vision 2030, a corporate goal that puts sustainability at the core of the company’s strategy.

Wong Wai Meng, CEO of Keppel Data Centers, said that the company is collaborating with industry leaders to explore ways to build and maintain more eco-friendly data centers.

This includes the development of floating data centre parks, tapping cold energy released from LNG re-gasification for cooling, hydrogen infrastructure for power generation, and accelerating the adoption of renewable energy as well as the development of carbon capture, utilisation and sequestration (CCUS) systems.

Keppel’s first data center fund, the Alpha Data Center Fund, was launched in 2016, and has since has a portfolio of investments in Singapore, Malaysia, Indonesia, China, Australia, and Germany, which spans 1.38 million square feet of floor area.

Keppel Data Centres launches $214m project to expand into China

Keppel Data Centres has announced their expansion plans to enter the data center market in China.

The Singapore-based data center provider’s private equity fund, Alpha DC Fund, will acquire and develop a high specification data center in Huizhou’s Tonghu Smart City.

“Demand for quality data centers has been increasing rapidly with the expansion of the digital economy globally,” said Mr. Alvin Mah, the CEO of Alpha DC Fund.

The Fund entered into an agreement through its subsidiary Alpha Investment Partners to acquire Huizhou Bike for US$214 million. Huizhou Bike, a subsidiary of Country Garden Holdings, originally had plans on developing the greenfield data center in Tonghu Smart City.

Country Garden, one of China’s leading property developers, will work with Keppel Data Centres to construct the core and shell of the data center in the park owned by Country Garden.

“This collaboration will allow us to deliver a safe, reliable and high specification data centre facility for customers in the Greater Bay Area,” said Mr. Wong Wai Meng, the CEO of Keppel Data Centres. 

For Alpha DC Fund’s first asset in China, the data center will fit more than 6,000 high-density racks, cover 487,000sq ft, and meet China Data Centre Class A GB-standard equivalent specifications.

The facility will be developed over two stages to be completed in 2021 and 2022. And Keppel suggests the data center can expand to another 538,200sq ft to reach more than one million square feet in total.

Upon completion, Keppel Data Centres will work with Shenzhen Huateng Smart Technology to operate the data center.

“The project will contribute to the upgrading of information infrastructure and economic development in Huizhou,” added Mr. Wai Meng.

The development is said to be strategically aligned with the Chinese Government’s New Infrastructure campaign, focusing on information-based and innovative infrastructure.

The country is expected to invest more than $3.5 trillion in construction over the next five years, according to Haitong Securities.

Keppel’s expansion into China follows their plans to develop data centers in Singapore with Singapore Press Holdings and exploration into sustainable green data center solutions.

What is the state of green data centers in Asia?

Data centers can produce staggering numbers of carbon emissions and electricity wastage. That’s why data center operators are trending towards the implementation of green data center solutions.

But not all countries in Asia may be adopting sustainable technologies at the same pace.

Register for free today to explore how the state of green data centers in South Korea compare to the rest of Asia.

Get involved in conversation and connect with your peers on LinkedIn and Facebook using #WMediaEvent!

Keppel Corp and Singapore Press Holdings to develop data centers in Singapore

Subsidiaries of Keppel Corporation and Singapore Press Holdings (SPH) have agreed to develop and operate data centers at Genting Lane in Singapore.

A joint venture company known as Memphis 1 was incorporated between TPM, a subsidiary of Singapore Press Holdings, and Keppel Data Centres’ subsidiaries, Keppel Griffin and Geras DC.

Memphis 1 is set to acquire a leasehold interest at 82 Genting Lane for S$50 million to develop and run data center facilities on the land. The sale is expected to be completed on July 17.

Keppel Griffin and Geras DC will hold a 60% share in Memphis 1, while TMP will hold 40% of the shares. The joint venture company will be an indirect subsidiary of Keppel Corporation.

The subsidiaries of Keppel Data Centres will contribute up to S$209 million, including S$2.1 million for the subscription price of their 60% share as well as S$34.5 million in bonds.

TPM will contribute approximately S$139.6 million, with S$1.39 million for their 40% stake, along with S$23 million in bonds.

These amounts will be paid progressively by way of debt securities, issued by Memphis 1 from time to time. The balance amount will be subscribed to nominees of Keppel Data Centres’ subsidiaries as the data center development progresses.

Upon completion, the data center will add to Keppel Data Centres growing list of more than 20 data centers owned and operated by the company.

The data center provider also recently entered into a partnership with Mitsubishi Heavy Industries to explore hydrogen-powered tri-generation plant concepts that could sustainably power data centers, including their proposed Floating Data Centre Park project.

Which data center is the best for your needs?

There is an overwhelming amount of choice when selecting the best data center for your needs. You may be asking questions about location, security, migration capabilities and sustainability.

We will answer all these questions and more at our ‘Data Center Selection & Migration in Asia Pacific’ digital event on Thursday 23 July.

Register for free today to find out how to choose the best data center for your digital transformation needs.

Get involved in conversation and connect with your peers on LinkedIn and Facebook using #WMediaEvent!

Keppel and Mitsubishi Heavy to explore hydrogen-powered data center concept in Singapore

Keppel Data Centres and Mitsubishi Heavy Industries are set to explore how hydrogen-powered data centers can accelerate Singapore’s journey towards a more sustainable energy future.

The two organisations signed a memorandum of understanding to study how hydrogen-powered tri-generation plant-supported data centers can meet expanding needs of the digital economy.

Mr Wong Wai Meng, Chief Executive Officer of Keppel Data Centres, said: “The exploration of hydrogen infrastructure is part of our strategy to work towards decarbonisation.”

Hydrogen as an energy source has the potential to be more environmentally friendly when it is burned because it does not produce greenhouse gas emissions.

“Hydrogen will be a key energy carrier in the global effort towards decarbonisation,” said Mr Yoshiyuki Hanasawa, Executive Vice President and Chief Regional Officer for Asia Pacific and India at Mitsubishi Heavy Industries Group and Managing Director of MHI-AP.

A tri-generation plant works by producing heat, power and cooling, supporting data centers to access the electricity as well as the chilled water produced by the plant to cool the facility. By tapping on the electricity provided by the plant, a data center relies less on the national grid.

Keppel Data Centres and Mitsubishi Heavy will look to produce hydrogen fuel for the plant through a steam methane reforming process that is carbon neutral by incorporating carbon capture and storage capabilities.

“With Singapore set to become a global data centre hub, we look forward to partnering with Keppel Data Centres to support Singapore in creating a sustainable energy future,” said Mr Hanasawa.

One of the projects that might benefit from the hydrogen-powered tri-generation plant concept is the Floating Data Centre Park project in Singapore that Keppel Data Centres is currently pursuing (pictured above).

Keppel Data Centres partnership with Mitsubishi Heavy is well timed, as Singapore is aiming to improve its environmental impact by introducing Green Data Centre Standards, a carbon tax at a rate of $5 for every tonne of greenhouse gas emissions, and a committal to ensure at least 80% of its buildings will be green by 2030.

As Singapore looks to continue in its digitalisation efforts and boost the digital economy, sustainable data center infrastructures will be essential in empowering this. 

Keppel DC REIT acquires data center tenant in Netherlands for S$1.55

Keppel DC REIT, the first data centre real estate investment trust listed in Asia, announced the acquisition of Borchveste Almere, the REIT’s tenant at Almere Data Centre in the Netherlands.

The trust purchased the private company for €1 or S$1.55 in order for Keppel DC REIT to hold a direct relationship with a client that was sub-leased by Borchveste Almere at the data centre in the Netherlands.

This sub-lease was Borchveste Almere’s sole business.

The acquisition was completed on the same day as the sale and purchase agreement, which was paid in full and in cash. The pro forma net asset value of Borchveste Almere’s shares was €0 at the time of purchase.

Keppel Data Centres Holding, which is a subsidiary of the REIT’s sponsor Keppel Telecommunications & Transportation, has agreed to be responsible for the expenses in relation to Borchveste Almere.

Keppel Data Centres also owns a data centre located next to Almere Data Centre.

The acquisition is not expected to have any material impact on Keppel DC REIT’s financial performance for the financial year ending on 31 December 2020.

As of writing, Keppel DC REIT is sitting strongly at the top of all other REITs in Singapore, with a net property income of more than $55 million in the first quarter of 2020.

In a presentation released this week, Keppel DC REIT expects demand for data centres to hold up during the pandemic along with a rise of 3.4% in global IT spending and a 14% growth in the global colocation market.

Keppel Data Centres enters into partnerships to explore sustainable Floating Data Centre Park and LNG solutions in Singapore

Keppel Data Centres has entered into agreements with Toll Group and Royal Vopak to study the possibilities for developing a Floating Data Centre Park and liquefied natural gas power solutions in Singapore.

These solutions aim to improve the power efficiency of Keppel’s data centers, decarbonise operations and save space in the land scarce country.

Keppel Data Centres and Toll Group, an Australian transportation and logistics company with an extensive network of warehouses and distribution facilities in Singapore, will explore the development of a Floating Data Centre Park based at the Loyang Offshore Supply Base.

Keppel Data Centres’ CEO Mr Wong Wai Meng said: “We see great potential in FDCPs as a commercially viable and attractive innovation that conserves land, water and energy, compared to traditional land-based data centres.”

With the growing global demand for data centres, Keppel Data Centres’ FDCP concept is an environmentally-friendly and resource-efficient way to meet the expanding needs of the digital economy. This is particularly important when 7% of all electricity consumption in Singapore comes from data centers each year.

The floating data center will use the surrounding seawater to cool the park and avoid using industrial water from cooling towers, which often results in wasting water through evaporation.

Mr Sam Eid, Executive Vice President of Global Logistics at Toll Group, said: “This initiative will allow Toll Group to take a significant role to improve space productivity and sustainability in Singapore whilst driving our primary focus.”

The FDCP will feature a modular design that can be scaled up quickly to meet customer demand. Keppel Data Centres hopes this will reduce the cost, time and carbon footprint related to constructing data centers. The older modules will also be recycled for deployment in other locations to fulfil their sustainability goals.

Powering data centers with Liquid Natural Gas and hydrogen solutions

Keppel Data Centres will also work together with Royal Vopak, an independent tank storage company, to assess the commercial viability of establishing LNG and hydrogen infrastructures that can power and cool facilities. Keppel Data Centres envisions this solution to generate onsite power and eliminate reliance on the national grid for the first floating data center in Singapore.

The President at Vopak LNG Mr Kees van Seventer said: “With our presence of 37 years in Singapore, we are committed to grow our footprint with sustainable infrastructure solutions.”

Keppel Data Centres initially entered into a partnership in 2019 with the Faculty of Engineering at the National University of Singapore and Singapore LNG Corporation to develop new prototypes that cool data centers and reduce their carbon footprint by harnessing cold energy released from the LNG regasification process.

These additional partnerships with Toll Group and Royal Vopak come at an opportune time, as Singapore is aiming to improve its environmental impact by introducing Green Data Centre Standards, a carbon tax at a rate of $5 for every tonne of greenhouse gas emissions, and a committal to ensure at least 80% of its buildings will be green by 2030.

What is next for Keppel Data Centres?

How have data centers been impacted by the recent pandemic and where will the industry look next for investment? 

Join the Inside Asia – Technology & Market Next Moves digital event on 30 April with industry experts, including Keppel Data Centre’s Head of Global Strategy and Investments Ong Kok Chye, to find out what’s next for the technology industry, the digital economy and tech spending.