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Hong Kong's Gaw Capital ties up with China firm to acquire data centres

By Asia Asset Management  
Nov 12, 2019

Hong Kong private equity manager Gaw Capital Partners and China’s Centrin Data have formed a joint venture to acquire a portfolio of internet data centres in the Mainland.

Gaw Capital has established a fund for the deal, to provide expertise in underwriting the investments, deal structuring, and project development and management, the company says in a statement on November 8.

Centrin Data, a Beijing-based firm that currently owns and operates four data centres, will focus on sourcing for sites, the design, leasing, and operations.

The statement did not provide details of their shareholding in the joint venture or the fundraising plans, and spokespersons for Gaw Capital did not immediately respond to questions from Asia Asset Management (AAM).

Their first project is a data centre in Jiangsu, close to Shanghai, but the identity of the current owner, the purchase price, and schedule of acquisition were not disclosed.

“We see significant opportunities in the [internet data centre] sector which is fast becoming a major theme in China as the country deepens its embrace of advanced technology,” Christina Gaw, managing principal and head of capital markets at Gaw Capital, says in the statement.

Gaw Capital Managing Principal and Head of China Humbert Pang adds that “geographical demand and supply imbalance make data centres near tier-one cities a valuable asset with stable rental income”.

Data centres are one of the fastest growing segments in China’s property market, driven by demand from rapid development of new technologies such as 5G and artificial intelligence, according to a fund analyst based in Shenzhen.

He says that last year alone, the size of China’s data centre market increased almost 30% from 2017 to around 123 billion RMB (US$17.5 billion).

“We expect this growth momentum will continue,” the analyst tells AAM, speaking on condition of anonymity.

Gaw Capital had $23 billion of total assets as of June 2019.