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Thailand’s first data centre REIT launches, commits $181m for first investment

Business wants to use the capital to fight with global cloud service firms from the US and China.

By João Marques Lima

Founder and Editor, The Tech Capital

4 Mins

July 23, 2021 | 12:00 AM BST

Thailand’s first data centre REIT launches, commits $181m for first investment

Morragot Kulatumyotin, managing director of INET. Source: INET

Thailand has joined a growing list of nations home to data centre real estate investment trusts (REIT), as the country accelerates its digital infrastructure deployments to cope with demand and host more data assets in-borders.

The new REIT is now in the Stock Exchange of Thailand-listed (SET) and has been launched by ICT infrastructure service provider Internet Thailand (INET).

The INET Leasehold Real Estate Investment Trust (INETREIT) plans to invest in INET’s data centres with initial capital commitments worth 4.3 billion baht (~US$181 million).

INETREIT is seen as a credit liquidity generator for INET and is to be used as an investment vehicle for INET’s data centre in Saraburi, located 120 Km north of Bangkok.

The site, code-named INET-IDC3 Phase 1, has a lease term lasting 24 years and five months and includes 20,450 sq ft of data halls, with an additional 38,750 sq ft being built to accommodate a customer centre and an extra building to house the facility’s power equipment.

INETREIT’s debut on the SET is anticipated for August 9, following an IPO with 330 million share units, priced at 10 baht ($0.30). Institutional investors are being given the opportunity to scope up to 200 million units.

In the SET listings page, closed end trust INETREIT is described as a brand that will be “investing in freehold rights of data center building, substation building and other relevant buildings, equipment and system work of INET-IDC3 Phase 1 Project and the leasehold rights on the land which is the location of substation building.”

INETREIT is to be managed by INET REIT Management Co. and is a trustee of Kasikom Asset Management Co. Jirayong Anuman-Rajadhon, managing director of Jay Capital Advisory, is serving as a financial advisor to INETREIT.

Morragot Kulatumyotin, managing director of INET, which is 49% owned by the Thai government, said: “The pandemic is driving growth of data usage and digitisation in Thailand – a catalyst for cloud services – which will grow 20% over the next three to five years.

“We are a top-three Thailand-based cloud service provider competing with global players. We are looking to gain more market share.”

INET’s cloud services are used by 4,300 customers, 10% of whom are government departments with the remainder being mid-sized enterprises as well as SET-listed companies. The company is the third-largest cloud operator in Thailand with a 14.8% of the total market value of more than six billion baht ($197.4 million), behind Amazon Web Services and Microsoft.

The company’s portfolio consists of three data centre properties, including sites at the Bangkok Thai Tower (INET-IDC 1), Thai Summit Tower (INET-IDC 2), and at Kaeng Khoi District Saraburi Province (INET-IDC 3).

Thailand’s data centre market size is expected to grow at a CAGR of over 7.99% during the period of 2020 to 2026, according to think thank Arizton.

The country is an emerging data centre market in Southeast Asia, driven by high demand from BSFI, automotive, retail, and content sectors, along with hyperscale service providers.

Most data centres in Thailand are located in Bangkok, clustered and as part of commercial buildings, whereas larger dedicated data centres are mostly located at a distance from the city.

Bangkok has 22 unique third-party data centre facilities accounting for over 55% of the existing power capacity.

Other locations such as Chon Buri, Saraburi, Pathum Thani, Chiang Mai, Khon Kaen, and Songkhla will witness increased investments in 2021-2026.

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Founder and Editor, The Tech Capital

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