International real estate group Lendlease (ASX: LLC) said it will invest A$800 million (US$600 million) to build its first data centre development in Japan under Lendlease Data Centre Partners (LLDCP).
Located in Greater Tokyo, the facility is sited on approximately 323,000 sq ft of land.
The phased development is planned to deliver more than 645,000 sq ft of gross floor area, in which close to half of the site has been pre-leased.
The firm said construction will commence later this year with the initial phase to be completed by early 2024.
LLDCP is funded 20% by Lendlease and 80 per cent by a global institutional investor. The fund’s mandate covers Australia, China, Japan, Malaysia and Singapore, and includes both completed assets and new development opportunities.
Under the partnership, Lendlease undertakes development, construction, property and investment management.
Andrew Gauci, managing director of Japan and head of telecoms and data infrastructure Asia, Lendlease, said: “The demand for data centres in the Asia Pacific is set to grow exponentially, with internet-related services usage soaring due to the pandemic. We are excited to launch our first data centre development under Lendlease Data Centre Partners.
“This project is of significant scale in a sector of growing importance in the digital economy, leveraging our more than 20 years’ experience in the local communications and data infrastructure space, as well as Lendlease’s broader presence in Japan for over 30 years.”
The capital Tokyo is one of the world’s five largest data centre metro clusters together with London, New York, Shanghai and Washington, which in aggregate account for 26% of the worldwide market, according to Structure Research.
Also commenting, Lendlease’s chief executive for Asia, Justin Gabbani, said: “This partnership is an exemplar of our updated strategy in action, leveraging our competitive edge and creating value with our partners. With our end-to-end integrated capabilities, we look forward to building on this to explore further investments in the future.
“This further cements our global leadership in providing best-in-class real estate solutions. Moreover, this also marks a significant milestone for the group, adding to its global development pipeline alongside five other new urbanisation projects globally.”
Japan has recently witnessed a steady flow of capital commitment into expanding data centre footprints across the country.
Some of the largest projects include Singapore-based Princeton Digital Group (PDG) and its 110 billion yen (US$1 billion) drive to expand its data centre footprint, Mitsui & Co’s 150 billion yen ($1.35 billion) plans, and APAC focused logistics real estate platform ESR Cayman (HKG: 1821) which plans to invest up to US$1 billion in building a data and logistics centre in the Nagasaki Prefecture, south Japan.