Canada Pension Plan Investment Board (CPP Investments) and Pacific Asset Management have formed a new joint venture to develop a hypescale data center in Seoul, South Korea.
CPP Investments and Pacific Asset Management Company this week announced a KRW 200 billion (US$164.4 million) joint venture to develop what they say will be the largest carrier-neutral hyperscale data center in South Korea.
The Jukjeon Data Centre will be located in the east of Seoul close to the Pangyo Techno Valley. The facility will span 99,070 square meters (1 million sq ft) and consist of four above-ground floors and four below-ground floors to provide commercial space for cloud service, Internet service, and information technology companies.
Upon completion in June 2024, the facility will be operated by LG CNS, a data center unit of the South Korean conglomerate. LG CNS currently operates four data centers in Busan, Sangam, Gasan, and Incheon totaling more than 160,000 sqm (1.72 million sq ft) in total and more than 40,000 sqm (430,500 sq ft) of IT floorspace.
"Demand for data centers in Asia Pacific continues to grow and is boosted further by the COVID-19 pandemic. Companies in South Korea are in need of digital infrastructure as the country is emerging as a technology and innovation hub in the region," said Gilles Chow, Managing Director, Head of Real Estate North Asia, CPP Investments. "This joint venture combines the strength of each partner to provide a best-in-class data center for tenants, and represents a significant investment opportunity for CPP Investments as we continue to expand our real estate portfolio in the region."
Hyundai E&C has been tapped to build the facility, which said construction is due to begin this month.
CPP Investments and a fund managed by Pacific will commit KRW 137 billion ($112.6 million) in equity for the project development, with CPP Investments allocating KRW 126 billion ($103.5 million). Other investors in the joint venture include Dreammark 1, GS Retail, and Shinhan Investment Corporation.
Pacific is an alternative investment management company specializing in real estate in the APAC region. It invests in offices, logistics, hotels, and multi-family buildings. This is seemingly its first data center investment. Last year CPP partnered with Japanese conglomerate Mitsui & Co to fund hyperscale data center developments in Japan. 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.
LG Uplus, LG’s telecoms unit, currently operates four colocation data centers — three in southern Seoul and one in Anyang, to the south of the capital. It broke ground on the 40,450 sqm (435,400 sq ft) Pyeongchon 2 Center in Seoul in June 2021.
