Hong Kong-based real asset manager ESR Group Limited and global data center provider CloudHQ have entered into a joint venture on $2 billion Cosmosquare data center campus in Nanko Kita, Osaka, Japan.

ESR said in a statement on Thursday that the duo will jointly build, fit out, and operate the entire Cosmosquare data center campus, which will deliver 130 megawatts (MW) of data center capacity over three phases (OS1, OS2, and OS3).

OS1 is ESR’s first data center facility in Japan and will be ready for service in June 2025.

Once fully fitted out, OS1 will provide customers with 25 MW of data center capacity.

“ESR Cosmosquare is a flagship project for ESR, and we are delighted to be working with CloudHQ to tap the immense data center growth opportunities that exist in Japan,” said Stuart Gibson, ESR Group Co-Founder and Co-Chief Executive Officer.

According to him, ESR has one of the largest real estate development teams in Asia Pacific (APAC), which enables the firm to leverage local market supply chain solutions and partnerships to deliver data centers on spec, on time, and on budget for the benefit of its data center partners.

“Additionally, this partnership showcases the unique competitive advantage of ESR’s multi-model data center platform in offering full flexibility to accommodate the diverse needs of our customers,” he added.

Hossein Fateh, Founder and Chief Executive Officer of CloudHQ, said the Cosmosquare data center campus represents a significant step forward in our mission to deliver state-of-the-art data center solutions globally.

“ESR’s deep local real estate knowledge combined with CloudHQ’s engineering expertise will make this a powerful partnership going forward,

“This joint venture will enable us to better serve our clients in Japan and across the Asia-Pacific region, ensuring they have access to the highest quality data center infrastructure and services,” he added.

Johnson Tan, Managing Director and Executive Vice President of CloudHQ Asia, added that this joint venture marks the firm’s ambitious expansion into the Asian market, where it sees immense potential for growth.

“We are excited to bring our expertise and advanced technology to this region and look forward to further opportunities to serve our customers in Asia,” he added.

It is noted that alongside logistics real estate as well as infrastructure and renewables, ESR’s accelerated data center strategy underpins the group’s next phase of growth as it unlocks opportunities driven by digitalization, cloud and artificial intelligence (AI) adoption.

ESR said the firm is committed to developing greener data centers, targeting net zero emissions for its data centers platform by 2040, with an interim goal of achieving 75 percent of renewable and low-carbon energy by 2030.

Commenting on the region’s huge unmet data center demand and rapid technology adoption, Diarmid Massey, Chief Executive Officer of ESR Data Centers, said the firm has a strong conviction in the growth of the data center market in Japan and across APAC.

“Our pipeline continues to develop in all APAC markets as we focus our business on developing world-class solutions and campuses for partners in Japan, South Korea, Australia, and India with the backing of our operating and capital partners,

“We are delivering on our commitments to build a diverse platform covering both established primary markets as well as developing markets regionally,” he added.

According to the statement, in Japan, surging demand for cloud services is fueled by the country’s manufacturing, automotive, financial services, healthcare, and government sectors.

The Japanese data center industry is expected to seize this growth opportunity, aiming to increase its market share by prioritizing technological innovation and sustainability, said the statement.

ESR’s other data center developments in Japan include previously announced campuses in both Keihana and Minoh City, Osaka, as well as Ariake, Tokyo.

Across the wider APAC region, ESR data center platform has assets in locations as diverse as Hong Kong, Mumbai and Seoul.

ESR’s pipeline of more than 2 GW of development ready projects with committed power supports partners and customers in core markets for AI and hyperscale cloud demand in Asia.

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