CPPIB invests $350m in Singapore data center fund

Canada Pension Plan Investment Board has partnered with Alpha Investment Partners and Keppel Data Centers Holdings, both of which are part of the Keppel Group, for an initial allocation of up to $350 million alongside the Alpha Data Centre Fund, with the option to invest another $150 million.

“The continued strong growth in data requirements globally has driven demand for quality data centre space, particularly in the Asia-Pacific region where digital infrastructure is relatively under-developed,” said Jimmy Phua, managing director and head of real estate investments Asia, CPPIB. “By investing alongside the Alpha Data Centre Fund, CPPIB is able to gain exposure into this critical sector, in partnership with the Keppel Group, a well-respected partner, leveraging established relationships and broad technical expertise with a focus on sustainability.”

CPPIB’s latest commitment and option will bring the ADCF’s combined and co-investment interest up to $1 billion, double the Fund’s initial target size of $500 million. When fully leveraged and invested, the Fund will potentially have assets under management of approximately $2.3 billion.

ADCF aims to develop a quality portfolio of new and existing data centre assets in Asia Pacific and Europe, capitalizing on strong demand in this asset class in key cities within these two regions. The Fund will leverage the broader Keppel Group’s relationships with key industry occupiers and expertise across a range of management, technical engineering and operational disciplines to deliver energy efficient facilities.

The ADCF was launched in July 2016 by Alpha, the private fund management arm of Keppel Capital, amid strong interest from institutional investors for quality alternative asset classes. The collaboration taps on Keppel Data Centre’s experience in designing, building and managing data centers for more than a decade. Keppel Data Centres is a 70-30 joint venture between Keppel Telecommunications & Transportation Ltd. and Keppel Land.

In July 2017, ADCF acquired a 70 percent stake in the Keppel DC Singapore 4, a carrier-neutral data centre which features approximately 182,000 square feet of gross floor area. In December 2016, ADCF announced its maiden acquisition of a 60 percent interest in Keppel DC Frankfurt 1 in Germany, a two-story facility located in close proximity to the city centre and Frankfurt airport.