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Private equity firms and infrastructure funds reportedly eyeing Sydney-based data center operator Air Trunk, attracted by strong growth and steady returns.
January 18, 2024
Privately held data center operator Air Trunk is said to be on the sale block, just one more sign of keen investor interest in Asia's data center market. The Sydney-headquartered company, which runs a dozen data centers in major Asian business hubs, is valued at around 12 billion Australian dollars (US$7.9 billion).
It was acquired by its current owners, led by Macquarie Asset Management and Canadian pension fund PSP Investments, in a 2020 deal that valued it at more than AU$3 billion ($1.97 billion).
Private equity firms and infrastructure-focused funds have shown early interest in the asset, although shareholders are yet to decide on going forward with a deal, Bloomberg reported Wednesday. They may sell off a partial stake or a controlling interest, it said.
The news underlines the appeal of data centers to Asian investors. With China still trying to reboot growth, digital infrastructure in the rest of the region offers plenty of upside, driven by demand for cloud, AI and e-commerce.
Data center markets in southeast and northeast Asia are likely to grow at about 25% a year over the next five years, well ahead of the forecast 14% in the US, according to Cushman & Wakefield.
Deployed capacity is also set to soar, with Indonesia, Malaysia, the Philippines and Thailand likely to more than double capacity over the next five to seven years, Synergy Research predicts.
The first deal of 2024 has already been struck. Just last week, BDX Indonesia, a partnership between data center player BDX and telcos Ooredoo and Indosat, acquired Indosat's colocation and edge assets for $169 million.
But the biggest players are the major private equity and infrastructure asset investors.
Last August Bain Capital took Nasdaq-listed Beijing-based Chindata private for $3.2 billion. The company operates hyperscale centers on China's eastern seaboard and some smaller facilities in India and Malaysia.
In September KKR agreed to pay up to 1.1 billion Singapore dollars (US$819 million) for a 20% stake in Singtel's regional data center business, most of which is in southeast Asia. In late 2022 Blackstone launched an India cloud and data center platform, planning 600MW in capacity in five cities.
"Data centers are being viewed as long-term safe havens for investments, even during turbulent times, causing a huge influx in private equity," said Synergy Research.
Read more about:Asia
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