Yahoo Finance Keppel data centre fund to jointly develop greenfield data centre in China for $292.0 mil
The latest project will be Keppel’s sixth.
Keppel Data Centre Fund II LP (KDCF II) has entered into a strategic partnership with Heying to jointly develop a greenfield data centre in Greater Beijing, China.
The latest development marks Keppel’s sixth project since entering the Chinese data centre market in 2020.
Heying is the wholly-owned subsidiary of Tianjin Zhengxin Group Co., Ltd.
KDCF II, which is managed by Alpha Investment Partners Limited (Alpha), is the private fund management arm of Keppel Capital.
Under the partnership, KDCF II will acquire a majority stake in Huailai Data Centre and jointly develop the property with Heying.
The project’s total development cost is around RMB1.4 billion ($292.0 million).
In addition, Keppel Data Centres will collaborate with Heying to implement global best practices for data centre operations at Huailai Data Centre.
The data centre is located on a 3.3 hectare land plot in Hualai County in Hebei province.
It is 65km away from Beijing central and 70km from Beijing Capital International Airport.
According to a 2019-2020 Beijing and surrounding areas IDC market research report by Kezhi Consulting, the data centre market in greater Beijing reached RMB30 billion in 2020. The figure implies a compound average growth rate (CAGR) of 26% from 2016 to 2020, and making it China’s largest data centre market.
The development of the data centre will take place in phases.
It will be fully developed by the end of the 1QFY2023.
The data centre will have an expected gross floor area (GFA) of 678,807 sq ft, which can fit more than 5,700 high-density racks and will hold the China Data Centre Class A GB-standard equivalent specifications.
It will also be fitted with the indirect evaporative cooling (IDEC) systems, which work by using evaporating water to cool airstreams and maintain humidity. This method consumes 50% less energy compared to traditional chilled water systems.
According to KDCF II, Huailai Data Centre has received strong indication of interest from a major cloud service provider in China.
“We are pleased to partner with Heying to enter into one of China’s largest data centre hubs. Demand for data centres in China has been resilient, attracting strong investor interest. Keppel Data Centre Fund II LP is well-positioned to seize investment opportunities in this growing sector as we are able to collaborate with the wider Keppel Group to provide robust and reliable data centre solutions,” says Alvin Mah, CEO of Alpha.
“We will continue to add more quality assets in key global markets to the Fund’s portfolio that will deliver optimal risk adjusted returns to our investors,” Mah adds.
Wong Wai Meng, CEO of Keppel Data Centres, says, “Keppel Data Centres’ strategy to work with strong experienced partners and in collaboration with Keppel Capital, enables us to harness synergies and scale up swiftly in developing and operating high quality data centres in our key growth markets”.
“This has helped place Keppel Data Centres in pole position to meet the requirements of cloud service providers, hyperscalers and technology firms in one of the world’s fastest growing markets, building on our strong data centre development and operational track record,” he adds.
The above-mentioned transaction is not expected to have any material impact on Keppel Corporation’s earnings per share (EPS) and net tangible assets (NTA) per share for the FY2022 ending December.
Shares in Keppel Corporation closed 10 cents higher or 1.57% up at $6.49 on July 18.
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