Real asset manager ESR Group has raised an initial sum of over US$1 billion for its Data Centre Fund 1, which will be dedicated to the development of data centre projects.
The fund is backed by global institutional investors, including sovereign wealth and pension funds. ESR has said it will also raise a separate discretionary capital sleeve to co-invest into the fund, potentially raising the fund to its hard cap of US$1.5 billion.
ESR will offer partners an upsize option of an additional equity commitment of US$1.5 billion, which could bring the total investment capacity to as much as US$7.5 billion over time.
ESR’s data centre development portfolio comprises data centre projects located in locations across Asia, including Hong Kong, Osaka, Tokyo, Seoul, Sydney, Mumbai and Singapore, delivering 300 MW of capacity.
Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, said: “APAC is the prime market for data centre development and investment in the new era of digitalisation. The substantial first close of our inaugural data centre fund marks a significant milestone for ESR as we continue to grow and scale our digital infrastructure business. We thank our capital partners for their strong support to this exciting effort.
“As the largest New Economy real estate platform in APAC, we are looking to play into the critical need for digital infrastructure in a big way going forward by leveraging our core competitive advantages – our deep land sourcing capabilities, best-in-class design and construction capabilities, an integrated fund management platform as well as commitment to sustainability – with a singular focus to support our capital partners and customers to thrive and capitalise on the continued rise of the New Economy and digital transformation in APAC.”
Diarmid Massey, ESR Data Centres CEO, added, “With nearly $60 billion of New Economy AUM, digital infrastructure is a key strategic focus for ESR Group. Naturally, our ambition is to offset high energy consumption by aligning with our ESG strategy to refurbish, re-develop, convert some of our existing 39.8 million sqm GFA of assets into large and edge data centres, and to explore sustainable options through actual renewable energy generation from the rooftops.”
The completion of the transaction is subject to relevant regulatory approvals.