Singtel and KKR lead would-be bidders for $1B data center deal

The Singtel-KKR consortium is eyeing a 20% minority stake in STT GDC as the two partners seek to strengthen their data center business in Southeast Asia.

Gigi Onag, Senior Editor, APAC

May 30, 2024

3 Min Read
Singtel billboard showing logo
(Source: tofino/Alamy Stock Photo)

A consortium of Singtel and US-based investment firm KKR is reportedly the leading bidder looking to acquire a 20% minority stake in ST Telemedia Global Centres (STT GDC) in a deal worth $1 billion. Citing anonymous sources, Reuters said Wednesday that a deal could be sealed or announced in early June.

Responding to the news report, Singtel said it "regularly explores and reviews business opportunities, projects and proposals relating to its business and enters into discussions with various parties from time to time."

"When such discussions occur, there is no certainty that any transaction will arise from these discussions or that any definitive or binding agreement will be entered into pursuant to these discussions," the Singapore-based telco operator said in a stock exchange filing released Wednesday.

Singtel confirmed that there is no definitive or binding agreement at this time.

According to Reuters, Singtel-KKR consortium is competing against Stonepeak, a New York-based investment firm, for the 20% stake in STT GDC.

Robust growth of data centers in Asia-Pacific

The Asia-Pacific data center market is currently witnessing a significant surge in growth in recent years as countries across the region embark farther into digitizing their economy with the rise of AI.

Related:Singtel sells 20% of its data center arm to fund expansion in Southeast Asia

According to a Cushman & Wakefield report released in February, the operational capacity of Asia-Pacific's data center markets has surpassed the 10GW mark.

"We continue to witness a robust development pipeline with 3.9GW under construction throughout the region and 9.4GW in planning stages, which is an increase of ~900MW since our last update," the report said.

The report added that almost 80% of operational capacity is concentrated in the region's top five markets – Mainland China (3.9GW), Japan (1.3GW), Australia (1.2GW), India (1.1GW) and Singapore (962MW),

Targeting Southeast Asia

Established in 2014, STT GDC has about 170 facilities in 11 countries in Asia and Europe. Considered one of the fastest-growing data center providers in Southeast Asia, its facilities in Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam have a combined capacity of more than 500MW.

Getting a minority stake in the company would align with Singtel's existing strategy to grow its data center business in the subregion.

In September, Singtel sold 20% of its regional data center business to KKR for 1.1 billion Singapore dollars (US$807 million) to raise funds for its expansion in Southeast Asia, specifically in Singapore, Indonesia and Thailand.

Meanwhile, STT GDC announced Thursday the AI-readiness of its facilities in Southeast Asia, which are designed to cater to AI clusters and general-purpose computing workloads.

The company said AI clusters are already operational in STT GDC's data centers in both Singapore and Thailand, with additional AI clusters expected to be operational in the Philippines, Indonesia and Malaysia within the next two years.

The announcement followed on the heels of two major company initiatives: its expansion into Vietnam and the construction of its second data center in Tokyo.

STT GDC has entered a joint venture with Vietnam's VNG Corporation to build and operate data centers in Ho Chi Minh City. 

This partnership entails the continuation of operations at the 9.6MW STT VNG Ho Chi Minh City 1 and the establishment of a new facility, STT VNG Ho Chi Minh City 2. The second data center is designed to carry an IT load capacity of up to 60MW and is expected to be operational in the first half of 2026.

In Tokyo, STT GDC has started the construction of its second facility, which will have a capacity of up to 38MW upon completion. It is scheduled to go live by early 2027.

The STT Tokyo 2 is part of  the company's new data center campus located within Goodman Business Park in Inzai City, in the Greater Tokyo Area. 

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About the Author(s)

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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