Keppel subsidiaries inked agreement to build first greenfield data centre in Malaysia

It will sit on a 261,000 sqft of land within an industrial park earmarked to be a data and research hub.

Keppel Data Centres Holding and Alpha Data Centre Fund (Alpha DC Fund) have inked agreements with a technology company to build and operate their first greenfield data centre in Johor, Malaysia, an announcement revealed.

The centre will sit on approximately 261,000 sqft of land within an industrial park which has been earmarked to be a data and research hub. The project company has already secured a third-party customer to fully lease the data centre upon completion which is slated for 2020.

“Enterprises have been moving to rationalise their ageing data centre infrastructure, including moving many workload requirements to the cloud,” Keppel Data Centres CEO Wong Wai Meng said. “In response, major cloud service providers and technology companies are expanding rapidly outside of top tier data centre markets to cater to this demand.”

The initial development of the data centre and its subsequent facilities will be undertaken by Keppel Data Centres, whilst Causeway DC (CDCPL) which is a special-purpose vehicle of Alpha DC Fund currently owns all the shares of the project company.

Under the agreement, CDCPL has a put option to require Keppel Data Centres to buy all of the shares in the project company for an amount of cash equal to the agreed property value of the project, plus its net asset value less the carrying value, according to the statement. After the put option is exercised, Keppel T&T's stake in the project will be 70% thanks to its interest in Keppel Data Centres.

Keppel Data Centres is a joint venture between Keppel Telecommunications & Transportation (T&T) and Keppel Land, which are both subsidiaries of Keppel Corp, with Keppel T&T holding a 70 per cent stake. Alpha DC Fund is a collaboration between Keppel Data Centres and Alpha Investment Partners which is a wholly owned unit of Keppel Corp’s asset management arm Keppel Capital.

“The proposed transaction enables the company to land the first data centre deal with the third party customer, which strategically opens doors to develop and operate other potential projects for the third party customer in Asia Pacific and Europe,” Keppel T&T said in a filing with the Singapore Exchange (SGX).