Hong Kong-based Gaw Capital Partners has teamed up with data centre specialist Centrin Data to establish and manage a portfolio of hyper-scale data centres in China.
Gaw Capital is raising a data centre fund to tap into the increasing investor demand for Chinese data centre assets, driven by advancements in 5G communications, 4K transmission, the Internet of Things (IoT) and artificial intelligence.
“We see significant opportunities in the IDC sector, which is fast becoming a major theme in China as the country deepens its embrace of advanced technology,” said Christina Gaw, managing principal and head of capital markets at Gaw Capital.
Gaw Capital will provide expertise including investment underwriting and transaction structuring, while Centrin will focus on site sourcing, design, leasing, operations and customer service.
The fund’s seed project is located in Kunshan, Jiangsu, which is 40km away from Shanghai city centre.
The project, which will have a gross floor area of 300,000 sq.m., is directly linked to Shanghai’s national level internet exchange point, which enables high network connectivity with low latency time.
The first phase of the project is occupied by a top-tier internet company, while the second phase will be completed in the early 2020s.
“High barriers to entry and demand-supply imbalance makes IDCs near tier-1 cities a very scarce asset,” said Humbert Pang, managing principal and head of China for Gaw Capital Partners.
“In China, there is an abundant supply of data centers in relatively remote areas, but most of the demand comes from tier-1 and tier-2 cities along China’s eastern coastal line. Geographical demand and supply imbalance make IDCs near tier-1 cities a valuable asset with stable rental income.”
Centrin Data has four data centre projects under management in Beijing, Huaqiao, Wuhan and Yantai, hosting more than 20,000 operational racks. It also has a pipeline of 55,000 racks under construction.
Gaw Capital has US$23bn in assets under management.