Japanese conglomerate Mitsui & Co and Canada Pension Plan Investment Board (CPP Investments) have established a data center joint venture.
The new Japanese Data Centre Development Fund (Mitsui Fund) will fund hyper-scale data center developments in Japan. The Mitsui Fund’s initial projects will be developing hyperscale facilities in greater Tokyo and Osaka areas in Japan.
CPP Investments said it will allocate approximately C$400 million ($548.1m) in equity into the venture.
“The COVID-19 pandemic has accelerated the demand for data centers globally. In Japan, the scarcity of developable sites near major urban areas such as Tokyo and Osaka and intense capital needs have presented further challenges in developing hyper-scale data centers,” said Jimmy Phua, MD and Head of Real Estate Asia Pacific, CPP Investments. “This investment will help address both the significant demand and constrained supply, providing tenants with high-quality space and service.”
CPP said the data centers will be managed by Mitsui’s real estate fund management subsidiary and operated by ‘experienced data center operators,’ likely to be Colt Data Centre Services.
Last week Mitsui and investment firm Fidelity announced the two companies had formed a joint venture to build hyperscale data centers in Japan. Owned 50:50 between the two companies, the new JV would build new facilities which would be managed by Fidelity-owned Colt Data Centre Services. Colt DCS currently has 50MW of existing capacity in Japan, which will almost triple to 140MW across Tokyo and Osaka.
As well as breaking the news of the Mitsui-Fidelity JV, Nikkei also reported CPP was to launch an investment fund focused on data center construction in partnership with Mitsui.
The publication reported the trading house is to invest a total of 300 billion yen ($2.7 billion) over the next five years developing new data centers and acquiring existing facilities. Nikkei said the company has joined forces with overseas investors to build three large facilities in three locations, including in Kyoto and the Chiba area of Tokyo, by 2026 at a cost of 150 billion yen ($1.35 billion).
The Canadian pension fund has previously invested in data centers, putting up to $350 million in the Alpha Data Centre Fund with Keppel in 2017.