CapitaLand Investment’s China data centre fund reaches S$530m close

CapitaLand China Data Centre Partners is the third such fund for CapitaLand Investment, which previously closed two South Korea data centre funds in 2020 and 2021, respectively.

Singapore-based real estate manager CapitaLand Investment has reached a S$530 million ($393.3 million; €371.6 million) one-and-done final close on its new China data centre development fund.

The fund, known as CapitaLand China Data Centre Partners (CDCP), attracted commitments from new and existing institutional investors globally who hold an 80 percent stake in CDCP, alongside co-investor CapitaLand Investment’s 20 percent stake in the fund.

The fund, which has a remit to invest in data centres in China, has already invested in two hyperscale data centre projects in Greater Beijing. Totalling 100MW of power, both are due to be completed in 2025, and bring CapitaLand Group’s data centre portfolio to 26, with 15 in Asia and 11 in Europe.

Speaking to Infrastructure Investor, Patrick Boocock, chief executive of CapitaLand Investment’s private equity alternative assets business, said the firm, which has S$46 billion in real estate assets under management in China, was well-placed to leverage its established networks and local expertise as it branches out into the country’s data centre market.

“Having been on the ground [in China] for the past 30 years as a developer, owner and manager of key real estate, including industrial and logistics, we felt that we had the right DNA to be getting into the date centre space there,” Boocock explained.

“We’ve been building up, over the last couple of years, a data centre team that’s vertically integrated and we have [a team] in China today across design, development, operations and customer relationships.”

CDCP is the third data centre-focused fund for the firm, which previously established two such funds in South Korea, both of which had just one round of fundraising. The first fund reached a 116 billion won ($89 million; €83 million) close in October 2020 and the second reached a 141 billion won close in May 2021. According to Boocock, investor interest in data centres has only intensified since then.

“In the last 12 months investor appetite for digital infrastructure, which includes data centres, has been increasing significantly. There was a strong appetite 12 to 24 months ago but today, it’s even stronger. Whether you’re a real estate investor or an infrastructure investor, you’re starting to do a lot more detailed deep dives on what digital infrastructure is, and the importance of it to the global economy. And as a result, appetite is increasing,” he said.

The new fund is one of a few digital infrastructure offerings to be launched by Asia-based real estate investment firms in recent years, following Arch Capital Management’s January launch of its digital infrastructure platform Digital Halo and ESR’s inaugural data centre fund ESR DC Fund 1, which raised more than $1 billion for its first close in July. Historically real estate-focused investment firm PAG also branched out into digital infrastructure with the November 2021 launch of FLOW Digital Infrastructure.