Singtel secures $800m investment from KKR for regional data centre business

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Singtel, a premier communications technology group in Asia, and global investment giant KKR have cemented a deal wherein KKR will invest up to S$1.1 billion ($800 million) for 20% ownership in Singtel’s regional data centre business. This transaction places the enterprise value of Singtel’s regional data centres at an estimated S$5.5 billion.

First-Time Collaboration and Strategic Goals

This inaugural partnership between Singtel and KKR aims to leverage KKR’s global expertise in data centre and telecommunications infrastructure investments. The capital infusion will be channeled to expedite the expansion of Singtel’s data centre operations in ASEAN countries like Singapore, Indonesia, and Thailand, while also exploring potential in other markets such as Malaysia.

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Singtel’s Growing Data Centre Portfolio

Singtel’s regional data centre operations are an extension of their newly formed Digital InfraCo unit, initiated in June 2023. Based on its strong foothold in Singapore, Singtel plans to add to its existing 62MW capacity with a new 58MW DC Tuas facility. Collaborations are also in place with Telkom and Medco Power in Indonesia, and GULF and AIS in Thailand to establish data centres in Batam and Bangkok, respectively. By 2025, these ventures are expected to contribute to a total combined capacity of over 155MW.

Industry Insights and Future Projections

The ASEAN data centre market is forecasted to grow by 17% in the next five years, outperforming the global average of 12%. Investments in the range of US$9 billion to US$13 billion are projected for the Southeast Asia region, with demand expected to outstrip supply due to increased data consumption and the accelerated adoption of cloud and AI technologies.

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Expert Quotes

Bill Chang, CEO of Singtel’s Digital InfraCo, stated, “KKR’s investment underscores the quality of our data centre portfolio and confidence in our plans to scale the business by capitalising on the digitalisation and rapid AI adoption that is transforming this region.”

David Luboff, Partner and Head of Asia Pacific Infrastructure at KKR, added, “We are pleased to provide this tailored solution to support the regional data centre platform of Singtel, one of the most longstanding and distinguished corporations in Singapore and a leading digital infrastructure provider in Asia Pacific.”

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KKR’s Strategy and Past Investments

The investment aligns with KKR’s broader strategy for infrastructure development in Asia, marking its latest venture in Southeast Asia’s data centre and digital infrastructure landscape. Previous KKR investments include projects in the Philippines, like Pinnacle Towers and First Gen, as well as Aster Renewable Energy.

Deal Closure

The deal is slated for completion by the fourth quarter of 2023, pending regulatory approval and other customary closing conditions.

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