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HK manager raises $1.3bn for Chinese data centre fund

A wholly-owned subsidiary of the Abu Dhabi Investment Authority was its largest investor, according to Gaw Capital Partners.

HK manager raises $1.3bn for Chinese data centre fund

Real estate private equity firm Gaw Capital Partners has announced the final close of an internet data centre (IDC) fund. 

The fund, which raised around $1.3bn in equity, will invest in projects alongside IDC developers and operators in China. 

A wholly-owned subsidiary of the Abu Dhabi Investment Authority was its largest investor, said managing principal and head of capital markets Christina Gaw.

Other global institutional investors contributed too. ‘These commitments we have received are a strong vote of confidence in Gaw Capital’s approach to IDC assets, which is a focused sector for us, and we have further plans to grow into other Asia regional markets,’ Gaw said. 

China’s IDC market grew more than 10 times from RMB 10.2bn ($1.5bn) to RMB 127.7bn ($18.7bn) from 2010 to 2018.

It had a compound annual growth rate of 37%, that was double the global average during the same period. 

Gaw Capital believes this growth will be sustained in the coming years, spurred by digital transformation and technology adoption across sectors.   

Humbert Pang, managing principal and head of China, observed a strong demand for data processing services with the pandemic.

Social distancing measures have resulted in an increasing use of data, that is being supported by China’s rapid adoption of 5G.

‘With most social and economic activities migrating online, data centres in promising locations along the densely populated region of China are emerging as valuable assets that produce stable rental income,’ Pang said. 

Gaw Capital has a series of six funds targeting the Asia Pacific region. It also manages a pan Asia hospitality fund, a European hospitality fund, and opportunistic funds in Vietnam and the US.

The firm has raised $15.6bn in equity since 2005, and has $26.7bn in assets under management as of 30 June. 

Last month, it closed two Asia-focused funds totalling $900m in commitments. The first invests in properties across various sectors, while the second focuses on properties in the education sector. 

Data centre investments have been in the news. In July, China’s CITIC Private Equity Funds Management announced a joint venture with GDS Holdings, a centre developer and operator.

They will respectively own 42% and 58% of the joint venture, and develop a 21,000 square metre data centre in Beijing’s Tongzhou district.

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