Hong Kong-headquartered real estate private equity firm Gaw Capital Partners announced on Friday the establishment of a new joint venture operating company, Data Center First Pte Ltd, with Wong Ka Vin as the Co-Founder & Chief Executive Officer with its maiden project in Batam, Indonesia.

Headquartered in Singapore, Data Center First is a data center operator and the first platform investment made by Gaw Capital Partners to support its internet data center (IDC) investments in Asia outside of China.

The data center campus in Nongsa Digital Park is the maiden project with Data Center First.

This project leverages on the fact that Nongsa Digital Park has been slated as the “Digital Bridge” that connects Singapore to many of Indonesia’s fast-growing cities, Gaw Capital said in a statement.

In addition to the maiden project in Batam, Data Center First will also work with Gaw Capital Partners to originate, evaluate, and develop data center projects in Southeast Asia and beyond.

The development came as demand for data centers surged amid COVID-19 pandemic, following a sharp rise in web traffic since last year as people stay home more often and turned to video streaming, online gaming, video conferencing, and online shopping. Between January to November last year, private equity firms, tycoons, and realtors have poured at least $6.57 billion into Southeast Asian data center companies and facilities, DealStreetAsia data show.

As the prospects for residential and commercial properties remain gloomy amid COVID-19, the data center is seen as the one section of Southeast Asia’s real estate sector that garnered major investor attention.

“I am excited to be working with Wong and his team of professionals in creating this data center operating platform. It signals a key milestone in Gaw Capital Partners’ growth in the data center industry, an industry that enables digital transformation opportunities for organizations globally to continue to grow,” said Kenneth Gaw, Gaw Capital Partners President and Managing Principal. “We plan to grow our regional data center platform rapidly through a combination of multiple asset and platform acquisitions and our partnership with Data Center First is the first step in the execution of this strategy.”

Gaw Capital Partners sees the IDC development as part of the bigger story that will encompass the broader and larger global opportunities that the digital economy brings, the firm said. There is an ever-growing amount of data traffic that is driving demand for data centers to consolidate servers, store data, and manage network support, thanks to technological advancements in 5G communications, 4K transmission, the Internet of Things, and artificial intelligence, it added.

“The next generation data center operators will need a deep understanding on how to exploit mechanical & engineering (M&E) and IT technologies in combination to create a more effective and valuable service experience for our customers,” Wong said.

IDC is a focus sector for Gaw Capital Partners. In September 2020, the company closed fundraising for its first IDC platform, which has invested in a portfolio of projects in partnership with IDC developers and operators in China, bringing the total equity raised of approximately $1.3 billion, to build “green, efficient, innovative and recyclable” data center clusters.

Gaw Capital Partners is a private equity fund management company focusing on real estate markets in the Asia Pacific and other markets globally. Gaw Capital runs an integrated business model with its own in-house asset management operating platforms in commercial, hospitality, property development, logistics, IDC, and education. The firm’s investments span the entire spectrum of real estate sectors, including residential development, offices, retail malls, serviced apartments, hotels, logistics warehouses, and IDC projects.

Gaw Capital has raised six commingled funds targeting the Greater China and APAC regions since 2005. The firm also manages value-add/opportunistic funds in Vietnam and the US, a Pan-Asia hospitality fund, a European hospitality fund, a Growth Equity Fund, and also provides services for separate account direct investments globally.

It announced in May the final close of its first commingled growth equity fund, Gaw Growth Equity Fund I, bringing the total equity raised for the fund to over $430 million.

Launched in late 2020, Gaw Growth Equity Fund I invests in PropTech and real estate-related operating companies that are high growth and highly scalable with a primary geographical focus on Pan-Asia. The fund closed with $332 million in total commitments and is approximately one-third committed.

Investors in Gaw Growth Equity Fund I include sovereign wealth funds, endowments, and other institutional investors.

Since 2005, Gaw Capital has commanded assets of $30.7 billion under management as of the first quarter of 2021.