Chinese data centre developer GDS Holdings Limited (NASDAQ: GDS; HKEX: 9698) has acquired a greenfield land in Nongsa Digital Park, located in Batam, Indonesia, where it intends to build two facilities.

The buildings are designed to reach a total net floor area of approximately 10,000 sqm/107,600 sqft and 28 MW of total IT power capacity.

GDS said it expects to secure a supply of renewable energy to support the data centre site.

William Huang, GDS Chairman and CEO, said: “We are seeing strong demand from our Chinese cloud and internet customers for hyperscale data centre capacity in Southeast Asia, particularly in Singapore or nearshore sites.

“We are pleased to have secured this high potential presence in Batam, which complements our presence in Johor Bahru. We look forward to deepening our relationship and working closely with the Indonesian government to move this project forward.”

The Indonesian Government has deemed Nongsa Digital Park a Special Economic Zone and Indonesia President Joko Widodo described it as the country’s “digital bridge” to the rest of the world.

GDS’ development in Nongsa Digital Park will complement its existing project in Nusajaya Tech Park, Johor Bahru, Malaysia forming a core for its “Singapore Plus” strategy in the region.

A joint statement from Indonesia’s Coordinating Ministry for Economic Affairs (CMEA) and the Ministry of Communication and Information Technology signed by Airlangga Hartarto, Minister of CMEA, said: “Indonesia’s exposure to GDS’s well-established partnerships with major state-of-the-art hyperscale facilities will further fuel our technical infrastructure dedicated to our fast-growing digital economy.

“We appreciate GDS’s strategic decision to invest in the recently created Special Economic Zone in Nongsa Digital Park in Batam. With these key developments, we strongly believe that Indonesia will now evolve quickly and robustly as a key player in Asia.”

Semuel A Pangerapan, Director General of Application Informatics of Ministry of Communication and Information Technology of Indonesia, added: “The acceleration of digital transformation in Indonesia is imperative in order to support the nation’s fast-growing digital economy as outlined in the Roadmap of Digital Indonesia 2021 – 2024.

“Data centre development is one of the important components that will enable not only the ecosystem digitalisation, but also Indonesia’s vision to become the region’s or even the world’s digital hub.”

GDS’ land acquisition mounts to the growing interest in expanding data centre operations to Batam by other competitors.

As recently as last month, Singapore-based Data Center First Pte Ltd broke ground on the first phase of a US$300 million data centre in the same location. Data Center First was formed last July through a joint venture (JV) between real estate private equity firm Gaw Capital Partners and businessman Ka Vin Wong, who also serves as CEO of operator.

Other Asian operators are rumoured to be looking at setting up a footprint in Batam, with some projects due to be unveiled in 2022.