Hong Kong-based Real estate private equity firm Gaw Capital Partners announced Thursday that the firm has formed a joint venture platform with Singapore-based real estate investment platform A3 Capital to invest into greenfield and under-performing data center assets across key markets in the Southeast Asia region.

The collaboration is aimed to create a portfolio of Tier-3 certified data center assets, both parties said in a statement.

This joint venture platform will also launch the Infinaxis Data Center platform with a focus on developing Internet Data Centre (IDC) assets across the Southeast Asia region.

The data center assets under the JV platform will be managed by Infinaxis, staffed by an experienced data center team originally under A3 Capital.

The joint venture platform’s first investment is located in Cyberjaya, Kuala Lumpur, Malaysia, with other pipeline opportunities in other neighboring countries like Indonesia and Singapore.

According to the statement, Cyberjaya is one of the largest IDC hubs in Malaysia, housing 67 percent of the Multi-Tenant Data Centre market in Malaysia as of the second quarter of 2021.

Considered as the “Silicon Valley of Malaysia”, Cyberjaya, spanning around 29 square kilometers, is the nucleus of the Multimedia Super Corridor in Malaysia.

Cyberjaya houses over 2,000 businesses, including small and medium-sized enterprises (SMEs), startups and multinational companies such as IBM, Fujitsu, Panasonic and Huawei, as well as seven universities, turning it into a regional and global ICT hub.

Located in Cyberjaya, the seed investment consists of two greenfield sites with a combined plot area of 12,490 square meters.

The joint venture platform will develop a 12 MW IT load IDC facility on one of the plots.

The IT capacity will potentially be doubled in the future, with the second plot to be developed as an expansion site.

The data center assets under the joint venture platform will be operated by Infinaxis, which consists of seasoned industry experts with decades long track records in data center, real estate and technology industries.

“By forming this strong partnership, we will develop, acquire or reposition four to five data centers in different locations throughout Southeast Asia,” said Kok Chye Ong, the Managing Director and Head of IDC Platform, Asia (Ex-China) of Gaw Capital Partners.

According to him, the data center demand in Malaysia is underpinned by strong internet traffic and high amount of data consumption.

He also noted that in recent years, the internet data growth in these areas have been further accelerated by the continued digital transformation of enterprises and 5G penetration.

He also noted that several government initiatives over the last decade have made Malaysia an attractive market for data centers.

However, he said the supply of quality data centers has not caught up with the technical demand from customers.

“We look forward to exploring more investment opportunities in this market,” he added.

Zahri Mirza, Chief Executive Officer (CEO) for Infinaxis, said the outlook for data center demand in Southeast Asia is indeed highly positive and the group’s collaboration with Gaw Capital will allow the firm to fast-track the delivery of services for its customers.

“Indeed, through our Gaw Capital partnership, we have been able to gain support from Malaysian Investment Development Authority (MIDA) and Malaysia Digital Economy Corporation (MDEC) in processing the necessary regulatory approvals in a timely manner,” he said.

The joint venture platform is committed to incorporating environmental, social and governance (ESG) principles.

Infinaxis plans to apply a staged implementation of more advanced sustainability features over time, considering the availability of options and unique circumstances at the respective sites.

The data centers will be more efficient and sustainable, fundamentally making them more competitive which will increase the platform’s long-term value.

Meanwhile, in recent years, IDC has been a focus sector for Gaw Capital Partners as the data center industry is one of the cornerstones of the digital economy, which is growing rapidly with broad prospects.

The firm was also highlighted for launching two data center platforms in China and two in Pan-Asia.

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

According to the statement, the Asia region represents as one of the geographic frontiers in the data center space with greater opportunities.

The Gaw Capital data center platform will also comprise data centers located in China, Indonesia, Japan, South Korea, Vietnam and now in Malaysia.

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