CapitaLand to build first data center in Japan with $700M investmentCapitaLand to build first data center in Japan with $700M investment

CapitaLand will expand its data center footprint to Japan, earmarking a $700 million to build its AI-ready facility in Osaka.

Gigi Onag, Senior Editor, APAC

February 5, 2025

2 Min Read
Server rack cluster in a data center
(Source: Viktor Cap/Alamy Stock Photo)

Singapore-based real estate asset manager CapitaLand Investment Limited (CLI) announced on Tuesday that it will invest US$700 million (944.3 million Singapore dollars) to build its first data center in Japan, which will be located on a newly acquired freehold site in Osaka.

The company added that it has also secured 50MW of power capacity for the project.

Michelle Lee, managing director of private funds (data center) at CLI, said that data center demand in Asia is expected to outpace new supply due to rapid digitization and adoption of AI.

"There is strong institutional interest in data center investments, with 97% of investors planning to increase their overall investment in data centers," Lee said in a statement, citing a September 2024 report from Cushman and Wakefield.

With its latest acquisition, CLI has added 23 data centers to its global portfolio since 2021.

The AI-ready data center in Osaka will be designed and built in accordance with Leadership in Energy and Environmental Design (LEED) or an equivalent Japanese green certification standard. To improve energy and water use efficiency, the facility will incorporate energy-saving solutions such as advanced cooling technologies and adopt industry best practices for temperature management. In addition, the data center will use products with a zero ozone depletion potential or a global warming potential (GWP) of less than 100 to minimize its impact on the environment.

Well-timed expansion

Across Asia and Europe, CapitaLand Group currently owns 27 data centers with approximately 800MW of power. It has approximately S$6 billion ($4.42 billion) of assets under management on a completed basis.

The group's data center investments span across nine countries, including Singapore, Japan, South Korea, India, China, the UK, France, the Netherlands and Switzerland.

According to Lee, CLI has raised an estimated $600 million (S$810 million) for its Asian data center development funds since October 2020.

"We will build on our investment momentum and identify compelling investment pipeline opportunities for our private fund investors," she added.

CLI's senior executive director, Manohar Khiatani, who oversees the group's data center business, said the Japanese data center market is poised for tremendous growth.

Citing figures from Statista's May 2024 report, Khiatani said that the country's data center market is expected to grow at a compound annual growth rate of 10%, from $23.8 billion in 2023 to $38.7 billion in 2028.

"It is also the Asia Pacific's largest data center market outside of China, with 1.4 gigawatts of capacity, and both Tokyo and Osaka being key data center hubs in the region," said Khiatani in a statement.

"Major cloud service providers such as Amazon Web Services, Google Cloud, Microsoft Azure and Oracle already have a presence in Osaka. As a result, our acquisition is well-positioned to capture demand in Osaka's established data center cluster," he added.

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About the Author

Gigi Onag

Senior Editor, APAC, Light Reading

Gigi Onag is Senior Editor, APAC, Light Reading. She has been a technology journalist for more than 15 years, covering various aspects of enterprise IT across Asia-Pacific.

She started with regional IT publications under CMP Asia (now Informa), including Asia Computer Weekly, Intelligent Enterprise Asia and Network Computing Asia and Teledotcom Asia. This was followed by stints with Computerworld Hong Kong and sister publications FutureIoT and FutureCIO. She had contributed articles to South China Morning Post, TechTarget and PC Market among others.

She interspersed her career as a technology editor with a brief sojourn into public relations before returning to journalism, joining the editorial team of Mix Magazine, a MICE publication and its sister publication Business Traveller Asia Pacific.

Gigi is based in Hong Kong and is keen to delve deeper into the region’s wide wild world of telecoms.

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