Singapore sovereign wealth fund GIC Pte Ltd and US technology company Equinix Inc. are forming a US$1 billion joint venture to develop data centres in Japan.
GIC will own 80% of the joint venture and pay cash for the stake, Equinix says in a statement on April 22.
The US firm will contribute its data centre assets in Tokyo and Osaka and their development rights, plus over $100 million in cash, for the balance 20%.
The joint venture will primarily develop data centres for Japanese hyperscale companies, including cloud service providers, and provide power capacity to the Osaka and Tokyo markets.
The deal comes nine months after GIC and Equinix teamed up to invest in hyperscale data centres in Europe.
“Following our successful partnership with GIC on the initial xSale data centre joint venture in Europe announced last year, we are now continuing our partnership with the formation of a new joint venture in Japan,” Charles Meyers, president and chief executive officer of Equinix, says in the statement.
GIC has been actively investing in infrastructure and data centre projects around the world, both on its own and with other investors such as China’s cloud technology firm GDS and private investment firm Mount Elbert Capital, according to an investment consultant based in Hong Kong.
He says such real asset investments can deliver stable cash flow and yield to the wealth fund.
“GIC currently allocates around 7% of total assets to real assets, but we believe it will gradually increase its exposure,” he tells Asia Asset Management, speaking on condition of anonymity.
GIC has over $100 billion of total assets currently, the sovereign wealth fund says on its website.
Nasdaq-listed Equinix operates data centres in more than 50 markets globally.