Rendering of the Fuchu City data centre facility (Image: Gaw Capital Partners)
A fund managed by Gaw Capital Partners has acquired a third property for its Greater Tokyo data centre campus, with the deal enabling the Hong Kong-based private equity firm to double the development’s total IT capacity upon completion.
With the fund manager anticipating an increase in demand for digital infrastructure from AI adoption, this latest project is set to add 38 megawatts (MW) of IT capacity to Gaw’s existing development in the Fuchu Intelligent Park data centre cluster in Fuchu City, bringing the campus in the western Tokyo suburb to 78 MW.
“The completion of the transaction allows us to double the scale of our data centres in Fuchu City, positioning us as the largest data centre facility in Fuchu City in terms of IT capacity,” Isabella Lo, principal of investments and head of Japan at Gaw Capital Partners said in a release on Monday. “Technological advancements in Japan, especially the ever-growing development of artificial intelligence, which requires exponential computing power, will continue to drive demand for data centres.”
Gaw Capital, which declined to disclose the acquisition price or the identity of the vendor, completed the purchase less than two months after the fund manager inked a partnership with Shanghai-based data centre developer and operator GDS to redevelop the campus’ initial two buildings, with that portion of the project set to provide 40 MW of capacity when operations commence by the end of 2026.
7,800 Racks
Isabella Lo, principal of investments and head of Japan at Gaw Capital Partners
Located 30 kilometres (19 miles) west of central Tokyo, this latest acquisition will add 11,233 square metres of land to Gaw’s Fuchu data centre campus, doubling the total site area to over 22,202 square metres.
The property, which had been an unnamed training and conference centre, is situated near two earlier Gaw Capital data centre project acquisitions in Fuchu, which funds managed by the company had acquired for undisclosed amounts in 2021 and 2022.
The earlier acquisitions serve as phases one and two of the project, and are currently being redeveloped into carrier-neutral tier III data centres, with the the latest property to be developed as the third phase of the project. The campus will accommodate 7,800 racks upon completion, subject to final design.
Phases one and two will be operated by GDS when those facilities commence operations by the end of 2026, while phase three will commence operations at a later date. Gaw Capital has yet to select an operator for the third phase, according to a spokesperson.
“This acquisition reinforces the strategic positioning of our pan-Asia IDC (internet data centre) platform,” said Kok Chye Ong, head of Asia ex-China IDC at Gaw Capital Partners. “Japan has a sizable internet economy that is expected to continue growing across all key segments and our data centres attract strong interest from potential operators and hyperscale tenants.”
Ong added that the expansion of its data centre capabilities in Japan, “…will enable us to meet the evolving needs of businesses seeking reliable and scalable infrastructure solutions in the country.”
Top Sector, Target Location
Having identified data centres as a sector and Japan as a location among primary targets for its pan-Asian Gateway Real Estate Fund VII, which closed on $3 billion in committed equity in June 2023, Gaw Capital joins a growing club of global investors pursuing digital infrastructure projects in the Land of the Rising Sun.
With increasing cloud adoption, data consumption and investment in artificial intelligence boosting demand for server facilities, HKEX-listed developer and fund manager ESR Group earlier this month announced plans to develop a 60 MW facility in Tokyo for its fourth data centre in Japan as the industrial specialist doubles down on a sector it expects will drive its continued expansion.
In March, Singapore-based Princeton Digital Group and Australian builder Lendlease completed construction of the 48 MW first phase of a 96 MW data centre campus in Saitama prefecture, north of Tokyo, with Warburg Pincus-backed PDG expecting to invest $1 billion across the life of the project.
That milestone came the same month that a joint venture between Mitsubishi Corporation and US-based Digital Realty opened a 34 MW data centre in Chiba prefecture, growing the partnership’s portfolio to three facilities in Greater Tokyo and seven overall in Japan.
Also in March, Singapore’s Keppel Ltd signed a tentative deal with Mitsui Fudosan to explore data centre development and investment opportunities in Japan and Southeast Asia, including a proposed forward purchase of a facility under development in western Tokyo that will mark Temasek-backed Keppel’s first data centre project in Japan.
This string of big bets on Japan’s digital infrastructure boosts the country’s leading position among APAC digital infrastructure markets with a report by Cushman & Wakefield earlier this year ranking the country second in the region with 1.3 gigawatts of operational capacity, trailing only mainland China’s 3.9 GW capacity.
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