Digital Edge Completes its Largest Acquisition To-Date in Japan
Company adds five more data centers to its portfolio across three major metropolitan centers in Japan
Singapore – December 2, 2021 – Digital Edge (Singapore) Holdings Pte. Ltd. (“Digital Edge” or the “Company”), today announced the acquisition of five data center assets from Itochu Techno-Solutions (CTC) for a total purchase price of approximately US$230 million (JPY26 billion), representing Digital Edge’s largest single investment in Japan to-date.
Through this transaction, Digital Edge has added a further 5,000 cabinets and 18.5MW of capacity to its Japan platform, bringing total MW capacity in Japan to approximately 38 MW. The five data centers are located in Tokyo, Yokohama and Kobe and as part of the transaction, Digital Edge has also acquired the underlying real properties in four of the five locations on which it plans to pursue new greenfield opportunities to support its growing retail and hyperscale business in Japan.
CTC, one of the leading IT services companies and a publicly listed company on the Tokyo Stock Exchange (code: 4739), will remain an anchor customer across all five data centers, and will work closely with the Digital Edge team to continue to grow the business at each of the facilities. Through the combined strengths of Digital Edge and CTC, enterprise customers will benefit from the ability to access both high quality data center infrastructure and world class IT & Cloud related services.
“Digital Edge is constantly looking for opportunities to continue expanding in Japan. Looking at the enterprise adaptation of cloud services and CTC’s track record and reputation at delivering outsourced IT services, this strategic partnership is a win-win for not only CTC and Digital Edge, but also our customers,” said Samuel Lee, Chief Executive Officer of Digital Edge. “We are excited to deepen our long-term partnership with CTC and to continue supporting their long-term growth from customer demands.”
According to Structure Research, Tokyo’s colocation market is expected to become a USD 3.4 billion market by 2026, growing at a 5-year CAGR of 9% between 2021 and 2026. Osaka’s market is expected to become a USD 1.1 billion market over the same time horizon, with a 5-year CAGR growth of 21%(1). Japan is focused on digital transformation, which drives high data usage due to the increased utilization of applications and platforms, such as data analytics, big data, and artificial intelligence (AI). This will in turn drive the demand for colocation and new capacity in the country’s key data center clusters, particularly outside the Tokyo and Osaka metropolitan areas such as Yokohama and Kobe.
"These five data centers have been used by a large number of customers for many years. By collaborating widely with existing and new data centers of Digital Edge, CTC will be able to provide more advanced open hybrid cloud services to its customers. By leveraging Digital Edge’s expertise in data center construction and operations, we are confident that this transaction and the synergy created thereby will accelerate growth opportunities for both parties,” says Eiji Haraguchi, Managing Executive Officer, Director of IT Services Business Group, CTC.
“Since Digital Edge’s inception, we have been committed to investing in Japan’s digital infrastructure to respond to the market demands in the greater Tokyo and Osaka regions. I am pleased to have this opportunity to crystallize a strategic partnership with CTC, as we look to continue operating, modernizing, and expanding these data centers with the latest technologies. The new capacity will further enhance our efforts to build ecosystems around all of our Japan data centers that are linked together by Cross LinkTM, our ultra high-speed connectivity solution,” said Kei Furuta, President of Digital Edge.
About Digital Edge
Headquartered in Singapore, Digital Edge is a trusted and forward-looking data center platform company, established to transform digital infrastructure in Asia. Through building and operating state-of-the-art, energy-efficient data centers rich with connectivity options, Digital Edge aims to bring new colocation and interconnect options to the Asian market, making infrastructure deployment in the region easy, efficient and economical.
Digital Edge was founded by a seasoned senior management team with decades of industry experience and an established track record of value creation in the data center, cloud and telecommunications industries in the Asia-Pacific region. Backed by Stonepeak, Digital Edge has in excess of US$1 billion in committed capital to establish a market leading pan-Asia data center platform.
ITOCHU Techno-Solutions Corporation (CTC) is a comprehensive IT services company that partners with its customers. From consulting to design, development and construction, operational and maintenance support, CTC combines sophisticated IT solutions and cloud services to solve customers' issues and to contribute to digital transformation. Providing optimum services in all fields including communication, broadcasting, manufacturing, finance, logistics and retail, public services, life sciences, science and engineering.
Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately US$39 billion of assets under management. Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, and to have a positive impact on the communities in which it operates. Stonepeak sponsors investment vehicles focused on private equity and credit. The firm provides capital, operational support, and committed partnership to sustainably grow investments in its target sectors, which include transport and logistics, communications, water, energy transition, and power and renewable energy. Stonepeak is headquartered in New York with offices in Austin, Houston, Hong Kong and Sydney. For more information, please visit www.stonepeakpartners.com.
Angel Yip / Frances Hui
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(1)Japan (Tokyo + Osaka) Data Centre Colocation, Hyperscale Market 2021