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ESR Group, Asia’s largest real estate fund manager by asset under management, has set up a joint venture with U.S. data center operator CloudHQ to co-develop a $2 billion data center in Japan.
The two companies will jointly build, fit out and operate the data center in Nanko Kita, Osaka, they said in a joint statement on Thursday. The project will deliver 130 megawatts (MW) of data center capacity over three phases, with the first being ready for service in June.
“This partnership showcases the unique competitive advantage of ESR’s multi-model data centre platform in offering full flexibility to accommodate the diverse needs of our customers,” Stuart Gibson, ESR cofounder and co-CEO, said in the statement.
Japan is among several countries in Asia that are seeing an influx of real estate managers, private equity firms and tech giants trying to capitalize on the soaring demand for data centers amid the artificial intelligence boom. Last year, Microsoft said it would invest $2.9 billion to expand cloud computing and AI infrastructure over two years in Japan—its largest-ever investment in the country. It followed Amazon Web Services’ $15 billion investment to expand cloud computing infrastructure in Japan by 2027.
Others that are doubling down on data centers in Japan include Gaw Capital Partners, the Hong Kong-based real estate private equity firm controlled by the billionaire Gaw family. Last year, Gaw Capital Partners doubled its total data center land size in Japan’s Fuchu Intelligent Pak following an acquisition at an undisclosed amount.
ESR’s Osaka project is among its four data centers under development in Japan. Others are a 100MW data center in Kyoto, as well as a 60MW and a 30MW project in Tokyo.
ESR said it’s the largest real estate investment manager in Asia, with an AUM of $154 billion as of June last year. In December, the Hong Kong-listed firm said it had received a $7 billion take-private offer from a consortium that includes U.S. private equity giants Starwood Capital Group and Warburg Pincus.
