ESR to develop US$2bn+ multi-phase data centre campus near Osaka CBD, Japan

TOKYO, JAPAN / HONG KONG SAR – Media OutReach – 8 April 2021 – ESR Cayman Limited (“ESR” or the
“Company”, together with its subsidiaries as the “Group”;
SEHK Stock Code: 1821), the largest APAC focused logistics real estate
platform, has acquired a key data centre asset in Osaka, Japan. The asset comprises
an existing data centre and excess land, totalling a development potential of
up to 78MW IT load. It is expected to have a potential GAV of US$2.15 billion,
depending on the ratio of operating model between powered shell and fully
fitted configurations for each building.

 

ESR will utilise the land to build two additional buildings, with a
combined IT load of 39MW as power will be available within 12 months. Construction of
the first data centre is expected to commence later in 2021, with target
completion scheduled in 2023. The existing data centre is expected to be
redeveloped into an additional 39MW IT load upon expiry of the current lease.
The three buildings together will form a significant data centre campus in the rapidly
growing Osaka market, offering customers the opportunity to lease data halls,
individual buildings or multiple buildings – providing scalability and
flexibility, ideal for both hyperscalers and colocation operators.

Jeffrey
Shen and Stuart Gibson, ESR Co-founders and Co-CEOs, remarked, “As a leading
provider of new economy infrastructure, it’s a natural move for ESR to expand
into the evolving ecosystem of data centres. We are tremendously excited to
launch our first data centre new development, creating a campus-style asset
with expansion capability in a prime location of a high growth market. This
acquisition adds to ESR’s data centre strategic push which now includes exclusivity
on land and power approvals to potentially develop over 200MW across major
markets in APAC.”  

 

The data centre campus is strategically located in Osaka City, within 10 km of the Osaka CBD where
Japan’s major Internet Exchange and other network exchanges attract a large
number of cloud on-ramps, telecom companies, leading IT-dependent enterprises
and an increasing number of hyperscalers.

 

As a key
gateway to Japan and to Asia, Osaka has established itself to be a major
commercial hub, second only to Tokyo. At the heart of the Kansai region which
has a population of 24.6 million and GDP of US$1 trillion, Osaka has a
world-class infrastructure and strong demographic fundamentals. The city has a
high concentration of pillar industries, including energy, financial services,
healthcare and medical services, advanced manufacturing – all of which rely
heavily on technologies such as big data, AI, 5G, robotics and IoT, making
Osaka a prime location for digital connectivity infrastructure. Today, Osaka is
the fifth largest data centre market in the APAC region (outside of China), yet
the supply of data centres remains highly limited due to a lack of land and
power supply.

 

The global
pandemic has flipped the norms under which businesses operate and the ways people
live and spend. Driven by the acceleration of e-commerce and fintech, as well
as by the rise of cloud solutions and smart technologies, the demand for data
centres has grown exponentially across APAC and the world. 

 

Against
this backdrop, ESR is very well positioned to play its part in developing
digital infrastructure in APAC: with hyperlocal presence that provides
unparalleled access to unique land origination, zoning and power approvals, and
development expertise; agility to acquire large land parcels and allocate land
bank to warehousing and data centres based on market demand; a large and
diverse logistics portfolio for potential redevelopment or repurpose into data
centres; and a dedicated team with deep expertise in development and fund management. Data centres offer lucrative
opportunities for both operators and investors, and ESR plans to expand its
data centre platform with select capital partners.

 

Commenting
on the outlook, Mr. Shen and Mr. Gibson added, “ESR has a proven track record
of consistently developing best-in-class assets and delivering top-notch project
management for our logistics tenants, many of whom are e-commerce giants who
also provide cloud services. Our operational expertise enables us to provide
one-stop solutions to cloud service providers and operators across all major
economies in APAC, meeting their needs and requirements beyond optimising
business performance and growth. The environmental footprint of the online
world is coming under constant scrutiny. ESR will work with cloud providers to
ensure that carbon reduction and responsible innovation are at the heart of all
of ESR’s data centre developments.

 

With the
prevalence of digital transformation in which data is the foundation, ESR will
capitalise on this secular trend by leveraging its in-house capability and
strategically partnering with operators and capital partners to build a network
of data centre infrastructure – in powered shell and fully fitted
configurations – in key metros across APAC. This network of agile and scalable data
centres will interconnect businesses and individuals in the digital economy,
support our customers’ growth in scale and reach, and create value for ESR’s ecosystem
of new economy infrastructure.”