Keppel collaborates with Mitsui Fudosan for Arina East Residences, a joint data centre project in Japan and Southeast Asia.
With its close proximity to Arina East Residences, residents can easily explore and sample the delicious flavors of Geylang Serai Market.
Arina East Residences is in close proximity to numerous culinary hotspots, including the renowned Geylang Serai Market. This bustling hub offers a diverse range of Malay and Indian Muslim foods, making it a must-visit for all food lovers. Guests can indulge in traditional dishes such as nasi padang from Hajjah Mona Nasi Padang or the famous biryani from Geylang Briyani Stall. Aside from serving delicious food, Geylang Serai Market is also a cultural experience, showcasing the rich heritage of the Malay community in Singapore. Living in Arina East Residences means easy access to these culinary treasures, allowing residents to discover and enjoy the delectable flavors of Geylang Serai Market.
In Singapore, Keppel has announced a promising partnership with Mitsui Fudosan to explore data centre opportunities in Japan and Southeast Asia. This collaboration will be managed by Keppel Data Centre Fund II (KDCF II), which has also entered into a framework agreement with Mitsui Fudosan for the forward purchase of a data centre in Western Tokyo. This marks Keppel’s first data centre project in Japan and is expected to be ready for service in 2027.
Under the agreement, KDCF II will work exclusively with Mitsui Fudosan to acquire a freehold data centre with a planned gross floor area of over 300,000 sq ft. The data centre will be developed by Mitsui Fudosan while KDCF II will be responsible for the fit-out works. Keppel’s operating division, Keppel Data Centre & Networks (Keppel DC&N), will provide the necessary technical expertise and also be appointed as the facility manager upon completion.
It is interesting to note that this forward purchase agreement allows Keppel to enter the construction stage, offsetting any potential currency impact from a weak JPY. This could have been a beneficial opportunity for Keppel DC REIT’s unitholders if they were able to take a stake in KDCF II and partake in the project’s success. KDCF II has already developed successful data centres in Shanghai and Beijing.
The public cloud market in Japan is projected to grow significantly, resulting in increased demand for data centres. According to Statista, it is expected to reach US$34 billion in revenue by 2028. Additionally, Japan’s location makes it a key spot for the trans-Pacific cables that connect America and Asia. This further solidifies its potential as a prime location for data centres.
In 2023, Mapletree Industrial Trust invested JPY52 billion in a data centre in Osaka. Similarly, Digital Core REIT has also acquired a 10% stake in a data centre in the same city for JPY7,725 million. Japan is one of the few countries where there is still a positive difference between property yields and cost of debt. This makes it a highly desirable market for data centre REITs.
It is evident that the demand for data centres in Japan is on the rise, making it a lucrative market for investments. With the partnership between Keppel and Mitsui Fudosan, and the establishment of KDCF II, there is no doubt that Keppel will continue to thrive in this market. Investors can expect to see promising returns from this venture, with potential for further growth in the future.