Keppel has acquired a data center outside Tokyo and has leased it to an unnamed hyperscaler.

The Singaporean asset management firm and its data center arm, Keppel DC REIT, took a 100 percent stake in the five-storey Tokyo Data Centre 3 for JPY 82.1 billion ($555 million).

Located northeast of Tokyo in Inzai City, Keppel did not disclose the third-party vendor from which it acquired the facility, nor did it reveal details about the facility’s capacity.

Keppel DC REIT also announced that it had launched an offer to raise S$404.5m ($315m) in equity, with a part of this used to fund around 30 percent of the acquisition cost. The rest will be made up by debt.

The leftover proceeds from the equity raise will be used to “finance an asset enhancement initiative at Keppel DC Singapore 8, cover associated costs for a 30-year land lease extension for Keppel DC Singapore 1, as well as for debt repayment purposes.”

The 15-year lease term will have built-in annual rent escalation.

CEO Loh Hwee Long said that “the favourable demand-supply dynamics for data centres in Japan and the country’s strategic position as an interconnect location between Asia and the Americas make it a compelling market for long-term growth.”

Japan has seen an influx of interest from American hyperscalers. A recent report by research firm Wood Mackenzie states that data centers are set to become the country’s largest driver of power demand growth, with consumption set to triple by 2034.

Most of Japan’s data centers are concentrated around its capital, Tokyo, and Kansai, its south-central region, which encompasses Osaka, Kyoto, and Kobe.

The Inzai area of Tokyo is one of the city's data center hotspots. Operators including STT GDC, Airtrunk, and Colt having a presence in the region.

Keppel’s data center portfolio currently totals 35 facilities across Europe and Asia Pacific, with 650MW of power capacity. The asset management firm closed its third data center investment fund in April, and its connectivity division recently inked an agreement with Dell to develop data centers.