ESR Cayman (HKG: 1821) and ARA Asset Management’s Logos are to raise as much as US$2.5 billion to fund data centre expansion projects across the APAC region as demand for digital services continues to generate business opportunities for data centre players.

The two firms are setting up two complementary funds to raise the necessary funds, according to Forbes.

Jeffrey Perlman, ESR’s chairman said the companies expect the first closing to take place in the first half of 2022.

Perlman said: “The rapid growth of e-commerce has only accelerated during the pandemic.

Digital transformation is ongoing in our daily lives. We are using Zoom and Teams every day and all that data need to be stored somewhere. It is stored in the cloud and so there’s a continued need for data centres.”

ESR is currently building a data centre development in Osaka, Japan, which is expected to have a gross asset value (GAV) of $2 billion.

The company is also carrying out works to redevelop an industrial asset it bought in May from the family of the late tycoon Tang Shing Bor into a data centre which has an expected GAV of approximately US$675 million upon completion.

Combined, ESR and Logos are expecting to develop 250MW of data centre capacity across APAC in the next few years with a GAV of $10 billion.

ESR is in the process of merging with ARA Asset Management after it proposed to acquire the firm for $5.2 billion last August.