Hong Kong-based ESR Group Limited has announced the first close of its inaugural vehicle, Data Centre Fund 1 (ESR DC Fund 1), which has so far gathered over $1 billion in equity commitments.
The fund, which is dedicated to the development of ESR’s growing data centre business, received commitments from the world’s largest institutional investors, including sovereign wealth and pension funds, according to the announcement.
In addition to the main fund, which is expected to close at the hard cap of $1.5 billion, ESR said it will also raise a separate discretionary capital sleeve to co-invest into the fund. The partners are also given an upsize option of an additional equity commitment of $1.5 billion.
ESR’s current data centre development portfolio includes data centre projects around Asia, including Hong Kong, Osaka, Tokyo, Seoul, Sydney, Mumbai, and Singapore. The said portfolio delivers 300 megawatts of IT load.
“The substantial first close of our inaugural data centre fund marks a significant milestone for ESR as we continue to grow and scale our digital infrastructure business,” said ESR’s co-founders and co-CEOs Jeffrey Shen and Stuart Gibson.
The first close of ESR DC Fund 1 comes as investor interest in Asia Pacific data centres continues to rise on the back of the rapid surge in data consumption.
According to data cited by ESR, data consumption has grown by four times over the past five years in Asia, while direct investment in the region’s data centre sector totalled $4.8 billion in 2021.
“The APAC Data Centre fund is uniquely placed to take advantage of ESR Group’s adjacencies in land, power, fibre origination, a strong pipeline of recently acquired data centre-specific sites, a dedicated team of experienced data centre professionals, and partnerships with best-in-class data centre operators for co-location assets,” said ESR Data Centres CIO Devashish Gupta.
ESR is Asia Pacific’s largest real asset manager powered by the new economy and the third largest listed real estate investment manager globally.
With $140.2 billion in total assets under management (AUM), its fully integrated development and investment management platform extends across key APAC markets, including China, Japan, South Korea, Australia, Singapore, India, New Zealand, and Southeast Asia, representing over 95% of GDP in APAC. It also has an expanding presence in Europe and the US.
In January, the company completed its $5.2-billion acquisition of real estate fund manager ARA Asset Management, including its subsidiary LOGOS.
Early this month, ESR agreed to sell an 873,000 sq m balance sheet portfolio in China to an unnamed global institutional investor. The announcement said the portfolio is worth about $730 million, with the transaction representing the largest self-developed balance sheet sell-down for ESR to date.