Partners broke ground today for the data centre development project in Western Tokyo

Keppel Ltd. (Keppel) is pleased to announce that its private fund, Keppel Data Centre Fund II (KDCF II), has entered into a sale and purchase agreement with Mitsui Fudosan Co. Ltd. (Mitsui Fudosan) for the forward purchase of Keppel Data Centre Tokyo 2 (Keppel DC Tokyo 2), an AI-ready data centre facility that is currently being developed by Mitsui Fudosan in Japan. This marks Keppel’s first data centre development project in Japan and its second data centre asset in the country.

This significant milestone follows an exclusive framework agreement signed between KDCF II and Mitsui Fudosan in early 2023 for the forward purchase of Keppel DC Tokyo 2, which will feature a planned gross floor area of more than 300,000 sq ft (approximately 27,871 sqm). Keppel and Mitsui Fudosan had also earlier signed a Memorandum of Understanding to jointly explore data centre development and investment opportunities in Japan and Southeast Asia. Japan is one of the fastest growing data centre hubs in Asia, which is projected to expand at a compounded annual growth rate of over 10% from 2024 to 2028^[1].

Keppel DC Tokyo 2 will be developed using the latest hyperscale designs and standards, offering enhanced energy efficiency, scalability and connectivity, and will be able to support liquid cooling solutions. The project combines Keppel’s technical expertise in developing and operating data centres, as well as strong customer relationships with international hyperscalers, with Mitsui Fudosan’s proven track record in sourcing land and delivering turnkey solutions for Japan’s real estate sector.

A groundbreaking ceremony was held in Western Tokyo today to mark the official commencement of the data centre’s construction following the earlier planning and design stage. The event was attended by Mr Loh Chin Hua, CEO of Keppel and Mr Hiroyuki Shinozuka, Chief Operating Officer (Logistics Properties Business Division), Mitsui Fudosan.   

Ms Christina Tan, CEO Fund Management and Chief Investment Officer of Keppel said, “We are delighted to celebrate the groundbreaking of Keppel DC Tokyo 2 which firmly establishes Keppel’s presence in Japan’s thriving data centre market. With the rapid growth of generative AI and cloud services, demand for data centres will continue to surge and we are well-positioned to meet the requirements of our hyperscale customers with another future-ready data centre. We look forward to working even closer with Mitsui Fudosan, a leader in real estate development, to further develop a quality pipeline of assets for our upcoming Keppel Data Centre Fund III.”

Mr Hiroyuki Shinozuka, Chief Operating Officer (Logistics Properties Business Division), Mitsui Fudosan said, “This win-win partnership has enabled Keppel and Mitsui Fudosan to leverage each other’s strengths to develop a high-quality data centre asset that will deliver value for all our stakeholders. Together, we are setting new standards for next generation digital infrastructure assets in Japan and we hope to further strengthen our collaboration with Keppel to explore more growth opportunities.”

Mitsui Fudosan will develop the core and shell of the data centre, while KDCF II will undertake the fit-out works by leveraging the operating and technical expertise of Keppel’s Connectivity Division. KDCF II will also appoint Keppel as the facility manager of the data centre, when the development is ready for service in 2027, thus contributing to Keppel’s recurring income.  

In October 2024, Keppel had announced plans to double its data centre capacity from the current 650 MW to 1.2 GW in the near-term with an additional S$10 billion in Funds Under Management (FUM) fuelled by the upcoming Keppel Data Centre Fund III and further co-investments from investors. Through Keppel’s integrated data centre ecosystem, the Company is well-positioned to drive its growth in the data centre business, through its access to multiple pools of capital, strong customer relationships with hyperscalers around the world, and deep operating capabilities in not only the development and operation of data centres, but also renewable energy, water efficiency, liquid cooling and other solutions needed by data centres.

The abovementioned development is not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel for the financial year ending 31 December 2024. 

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Note to Editors:

Keppel has over two decades of experience in designing, developing and operating data centres. The Company has built strong customer relationships with hyperscalers worldwide and its portfolio comprises 35 data centres^[2] across key data centre hubs in Asia Pacific and Europe with a total gross power capacity of 650 MW, of which about 70% is currently operational.

To meet rising demand for AI-ready data centres, Keppel is developing various data centre projects in Singapore, Taiwan and Japan amounting to 220 MW of capacity. These projects form part of Keppel’s ambitious data centre strategy to build up a quality pipeline of future-ready assets, which will add to its FUM.

Keppel is aiming to expand its data centre portfolio by over 500 MW to 1.2 GW in total in the near-term, fuelled by an additional S$10 billion Funds under Management (FUM) growth from its upcoming Keppel Data Centre Fund III, as well as further co-investments from investors. With this, Keppel expects its data centre FUM to more than double from the current S$9 billion to S$19 billion.

As a leading data centre player, Keppel has also been pushing the envelope for more sustainable data centre operations through innovative concepts such as floating data centres cooled by seawater, a 1 GW nearshore net-zero DataPark+ concept powered by renewable energy, as well as data centre designs that are optimised for the tropics.

About Keppel

Keppel Ltd. (SGX:BN4) is a global asset manager and operator with strong expertise in sustainability-related solutions spanning the areas of infrastructure, real estate and connectivity. Headquartered in Singapore, Keppel operates in more than 20 countries worldwide, providing critical infrastructure and services for renewables, clean energy, decarbonisation, sustainable urban renewal and digital connectivity. Keppel creates value for investors and stakeholders through its quality investment platforms and diverse asset portfolios, including private funds and listed real estate and business trusts.

^[1] 451 Research, 1Q 2024.

^[2] Including Keppel’s portfolio of 33 data centre assets as at end-September 2024, as well as two pipeline assets being planned, namely Keppel DC SGP 9 which is part of the Keppel Data Centre Campus in Singapore, and Keppel DC Tokyo 2 in Japan.