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Singapore's GIC, US firm team up in US$1 billion-plus Europe data centre deal

By Asia Asset Management  
Jul 4, 2019

Singapore sovereign wealth fund GIC Pte Ltd is teaming up with US data centre operator Equinix to acquire and develop six hyperscale data centres in Europe for over US$1 billion.

This is GIC’s third data centre deal in a year, underscoring the fund’s move to tap the potential of a market that’s driven by growing demand for cloud services.

The latest joint venture involves the acquisition of two centres in Europe that are already operational – one in London and one in Paris – and building four others, GIC says in a statement on July 1. Two of the new centres will be in Frankfurt, and one each in London and Amsterdam.

A hyperscale data centre occupies at least 10,000 square feet of space. Some of the largest in the world are many times bigger – at least 500,000 square feet – and can house millions of servers.

Lee Kok Sun, chief investment officer of GIC's real estate division, says the fund believes the investment can generate "steady and resilient returns" in the long term.

"We look forward to expanding our global partnerships and exploring further opportunities in this fast-growing sector worldwide," Mr. Lee says in the statement.

“As a long-term value investor, we are confident that the strong growth in data consumption and public cloud data storage will continue to drive secular demand for hyperscale data centres," he adds.

GIC has been actively increasing its data centre portfolio in recent years, banking on the growing trend of cloud-based services and mobile applications, which are powered by data centres.

Last month, the fund teamed up with Singapore-based Polymer Connected to build a data centre campus in Indonesia for an undisclosed price.

In June 2018, GIC partnered with Denver-based private equity firm Mount Elbert Capital Partners, and OpTrust, which manages the assets of Canada's Ontario Public Service Employees Union Pension Plan, to form an investment unit to develop, acquire and operate data centres in the US.

GIC does not publicly disclose its assets data. According to the Sovereign Wealth Centre, the fund had $398 billion of assets under management as at March 31, 2018.