Macquarie Korea Infrastructure Fund (MKIF) has signed a deal to buy a 40MW data center in Seoul, South Korea.

Reports that MKIF might purchase the facility first emerged in June 2024.

First reported by the Australian Financial Review, the data center is located in Hanam, around 10 kilometers east of Seoul, and is being acquired from Seoul-based IGIS Asset Management Co. for $538.4 million.

Spanning 41,919 sqm (451,212 sq ft) across 12 stories, Kakao Corp rents 92 percent of the data center with LG Group's LG CNS Co. renting the remaining eight percent.

The transaction is currently set to be completed in September.

“We see rising demand for data centers as they are the core infrastructure assets for growth of generative artificial intelligence and cloud services and upward trend in outsourcing,” said Macquarie Korea Asset Management Co. representative director Suh Boum Sik.

“We forecast growing demand for Hanam IDC from corporate clients as the asset is located in the Seoul metropolitan area, where stable communication networks are available and securing additional water sources is challenged.”

MKIF is expected to spend a total of around $672 million on the facility, having agreed to a reduced valuation of the data center in exchange for covering remaining construction costs including mechanical, electrical, and plumbing systems along with some financing costs.

MKIF will pay for the transaction with a combination of equity, subordinated loans, and senior loans. The transaction will go through with a cap rate in the low to mid-six percent range.

IGIS is said to have broken ground on the data center in October 2021. Reports that the company was looking to sell the facility surfaced in November 2023.

IGIS and LG CNS teamed up to develop data centers in September 2023.

Macquarie is currently looking to offload APAC data center operator AirTrunk. In June 2024, it was reported that GIP, Blackstone, and DigitalBridge were among those bidding on the operator. Silver Lake joined the hunt at the end of July.

AirTrunk was founded in 2016 with plans to develop hyperscale data centers in Australia. The company opened its first facility in Sydney in 2017. Since then, the company has expanded across the region, operating and developing campuses in Australia, Hong Kong, Japan, Malaysia, and Singapore.

Macquarie Asset Management and PSP Investments currently hold a combined 88 percent stake in the company.