ESR Cayman Limited (ESR), an APAC-focused logistics real estate platform, has acquired a major data center property in Osaka, Japan.
The asset includes an existing data center and excess land with development potential of up to 78 MW IT -Workload. Depending on the operating model’s relationship between the powered envelope and the fully featured configurations for each building, a potential GAV of $ 2.15 billion is expected.
ESR will use the land for the construction of two additional buildings with a combined IT load of 39 MW, as the electricity will be available within 12 months.
Construction of the first data center is expected to begin in the course of 2021 . Completion is planned for 2023. The existing data center is expected to be converted to an additional IT load of 39 MW after the current lease expires. The three buildings together form a significant data center campus in Osaka’s fast-growing market and offer customers the option of renting data halls, individual buildings or multiple buildings. This offers scalability and flexibility, ideal for both hyperscalers and colocation operators.
Jeffrey Shen and Stuart Gibson, ESR Co-Founders and Co-CEOs, said, “As a leading provider of new economy infrastructure, it is natural for ESR to expand into the evolving data center ecosystem. We’re extremely excited to launch our first new data center development and create a campus-style asset with expandability in a prime location in a high-growth market. This acquisition complements ESR’s data center strategic push that now includes land and power license exclusivity to potentially develop over 200 MW in APAC’s key markets. «
The data center campus is strategically located in Osaka City, 6 miles from the central business district of Osaka, where Japan’s largest internet exchange and other network exchanges attract large numbers of cloud on ramps, telecommunications companies, leading IT-dependent companies and an increasing number of corporate hyperscalers .
As an important gateway to Japan and Asia, Osaka has established itself as an important trading center after Tokyo. In the heart of the Kansai region of 24.6 million people and a GDP of $ 1 trillion, Osaka has world-class infrastructure and solid demographics. The city has a high concentration of columnar industries including energy, financial services, healthcare and medical services, and advanced manufacturing. All of this relies heavily on technologies like big data, AI, 5G, robotics and IoT, which makes Osaka a prime location for digital connectivity infrastructure. Today Osaka is the fifth largest data center market in the APAC region (outside of China). However, the availability of data centers is still severely limited due to a lack of land and power supply.
The global pandemic has flipped the norms by which businesses operate and the way people live and spend. With the acceleration of e-commerce and fintech, as well as the rise of cloud solutions and intelligent technologies, the demand for data centers in APAC and around the world has grown exponentially.
With this in mind, ESR is very well positioned to contribute to the development of the digital infrastructure in APAC: with a hyper-local presence that provides unparalleled access to unique land formation, zoning and approval of energy, as well as development expertise; Agility in acquiring large parcels of land and assigning land banks to warehouse and data centers based on market demand; a large and diverse logistics portfolio for possible renovation or conversion in data centers; and a dedicated team with deep expertise in development and fund management. Data centers offer both operators and investors lucrative opportunities, and ESR plans to expand its data center platform with selected capital partners.
Adds Shen and Gibson, “ESR has a proven track record of consistently developing world class assets and delivering world class project management to our logistics tenants, many of whom are e-commerce giants who also offer cloud services. Our operational expertise enables us to offer cloud service providers and operators in all major APAC economies from a single source solutions that meet their needs and requirements beyond the optimization of business performance and growth. The ecological footprint of the online world is constantly being reviewed. ESR will work with cloud providers to ensure that carbon reduction and responsible innovation are at the heart of all developments at ESR’s data center.
With the spread of digital transformation, where data is the foundation, ESR will capitalize on this secular trend by leveraging its in-house capabilities and working strategically with operators and capital partners to build a network of data center infrastructures – in powered shell and fully equipped configurations – in key metros via APAC. This network of agile and scalable data centers will connect businesses and individuals in the digital economy, support our customers’ growth in size and reach, and create value for the ESR ecosystem of new economy infrastructure. «
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