Saturday, November 25, 2017

CPPIB announces up to $350m in data centre investment boost across APAC and Europe

Fund follows on form a partnership with private fund management Alpha Investment Partners and data centre operator Keppel Data Centres.

The Canada Pension Plan Investment Board (CPPIB) has announced the allocation of up to $350m towards data centre developments as investment bodies continue to intensify their backing of the sector.

The Alpha Data Centre Fund’s (ADCF) allocation has come as CPPIB also entered a partnership with private fund management Alpha Investment Partners and Keppel Data Centres, both of which are part of the Keppel Group.

The fund also includes an option to invest another $150m in the future whilst CPPIB’s latest option will bring the ADCF’s combined and co-investment interest up to $1bn, double the fund’s initial target size of $500m when it launched in July 2016.

According to the body, when fully leveraged and invested, the fund will potentially have assets under management of approximately $2.3bn.

The ADCF has been created to enhance the development of greenfield and brownfield data centre assets in Asia Pacific and Europe, “capitalising on strong demand in this asset class in key cities within these two regions”.

Christina Tan, CEO of Keppel Capital and Managing Director of Alpha, said: “The Alpha Data Centre Fund is a prime example of how we can harness synergy and expertise across the Keppel Group to create value and deliver enhanced returns to investors.

“The strong interest garnered and successful closing of the Fund are testament to Keppel’s ability to grow our capital platform with investments from quality global institutional investors.”

Jimmy Phua, Managing Director and Head of Real Estate Investments Asia, of CPPIB, said: “By investing alongside the Alpha Data Centre Fund, CPPIB is able to gain exposure into this critical sector, in partnership with the Keppel Group, a well-respected partner, leveraging established relationships and broad technical expertise with a focus on sustainability.”

The fund’s launch in summer 2016 has been followed by other important transactions within the Keppel portfolio and estate as in, for example, July 2017, ADCF acquired a 70% stake in the Keppel DC Singapore 4, a carrier-neutral data centre which features approximately 182,000 sq. ft. of gross floor area.

Previously, in December 2016, ADCF announced its maiden acquisition of a 60% interest in Keppel DC Frankfurt 1 in Germany, a two-storey facility located in close proximity to the city centre and Frankfurt airport.