1-Net North Data Centre sold by tender for $200.2 million

Image credit: Cushman & Wakefield

Cushman & Wakefield was mandated by DataCentre One (owned by Keppel Infrastructure Trust and WDC Development Pte Ltd) to conduct the tender for the sale of 1-Net North Data Centre in June 2019 and eventually sold the 100 per cent interest in DataCentre One for $200.2 million.

Shaun Poh, Executive Director, Capital Markets, Cushman & Wakefield who handled the sale of 1-Net North Data Centre said “The sale is noteworthy given that the supply of data centres is tight across Asia, particularly in Singapore.”

“Data centres are tightly held in the city-state, typically by Telcos, conglomerates and REITs and hardly offered in the market. The tight supply situation is compounded by the fact that Singapore has pledged to reduce carbon emissions putting a lid on the allocation of land for data centre use as these assets consume high volumes of energy. As expected, this tender attracted sizeable interest from investors both local and international.”

1-Net North Data Centre
Image credit: Cushman & Wakefield

1-Net North Data Centre is located at 18 Riverside Road and spans 200,000 sq ft in available area. 1-Net North Data Centre offers stable, secure and high-powered infrastructure for digitised content, the facility has achieved Uptime Institute Tier 3 certification and conforms with the Monetary Authority of Singapore’s Threat Vulnerability Risk Assessment (TVRA) specifications.

1-Net North Data Centre has also attained Green Mark GoldPlus certification under the Green Mark for Data Centres rating system jointly developed by Singapore’s Building and Construction Authority and Infocomm Development Authority. The rating system recognises performance efficiencies in areas such as energy, water and environment, with a significantly higher emphasis placed on energy performance.

A recent research by CBRE reported that Singapore, the largest data centre market in this region, will remain as a tenants’ market because of ample supply.

The CBRE report titled ‘Asia Pacific Data Centre Trends Q1’, said the region’s data centre market continues to expand. Colocation supply across the ten Asia Pacific markets covered by CBRE Data Centre Solutions Services totalled of 1,772 MegaWatts (MW) in Q1 2019.

Demand is predominantly coming from large technology and global cloud corporates from the U.S. and China, ensuring fitted capacity remains tight across the region, said the report.

“The pipeline is totaled for about 800 MW which will help to ease the tight availability over the past few years. Nonetheless, Singapore, the largest data centre market in this region, will remain as a tenants’ market with the ample supply.”

The report noted that with 20 submarine cable systems landing, Singapore is the best connected tier I market in Asia Pacific. It added that strong connectivity along with reliable power supply sources has helped Singapore become not only the largest data centre market in this region, but also a data centre hub.

“The city-state’s conducive business environment has also allowed the data centre industry to flourish and created a highly competitive market. The presence of reputable international and local operators with strong track records has ensured end users have greater leverage and options for their deployments.”

CBRE said that large-sized technology and cloud companies have been the major demand drivers, displaying large and unprecedented requirements and accounting for a significant amount of colocation space in the last 18 months. A colocation data centre is a standalone building in which multiple companies share space for storing and running their IT equipment, akin to a multi-tenant office building or apartment complex.

A Hyperscale Colocation typically denotes large power requirements (>500 kilowatts, kW) but end-user is specifically a cloud or large tech company with requirements for scalable power, storage, and cooling; whereas wholesale colocation typically denotes large power requirements (>500 kilowatts, kW).

CBRE said in its report that it only tracks carrier neutral colocation markets which excludes non-carrier neutral facilities, system integrators and self owned facilities (including the hyperscale cloud). CBRE expects significant new supply to enter the market in the next three years, with an estimated pipeline of 177.2 MW, equivalent to around half of existing supply.

The research said that Singapore will remain an end-user market over the next 24 months due to its ample pipeline. However, data centres with strong connectivity will still be able to command premium rents for retail co-location requirements, the research added. CBRE’s report on Asia Pacific Data Centre Trends comes after it launched a specialist service for investors who want to buy into data centers.

Demand for data center investment has never been greater as aggressive foreign capital, institutional investors and infrastructure funds have started targeting the asset class.

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Written by Ravi Chandran

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