Singapore’s STT GDC forms US$350m Philippines data centre venture

Singapore’s STT GDC forms US$350m Philippines data centre venture

Deal has potential for 100 MW capacity.

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One of Singapore’s leading data centre operators, ST Telemedia Global Data Centres (STT GDC), has formed a joint venture in the Philippines with Globe, a digital solutions platform, and Ayala Corporation (AC), for the development, construction and operation of data centre projects in the country.

Under the agreement, both STT GDC and AC will subscribe to new shares in KarmanEdge, a 100 percent owned subsidiary of Globe that will house the carved-out data centre business.

The capital infusion by the new partners will result in a post-money valuation of KarmanEdge, at over US$350 million.

Globe will remain the largest shareholder with 50 percent ownership, followed by STT GDC with 40 percent and AC taking up the remaining 10 percent. 

Globe will receive proceeds of US$100 million from the transaction with the remaining capital injected to be used by the business for future expansion and growth.

The transaction is expected to be completed by the first quarter of this year and will be subject to customary closing conditions, including relevant regulatory approvals. 

According to a joint statement from the companies, after the share subscription agreement, KarmanEdge would have the potential to expand by up to 100 MW capacity in the mid-to-long term. 

The Philippines is one of the fast-growing data centre markets in Southeast Asia.

According to a report by Research and Markets, the Philippines data centre market is expected to witness cumulative investments of US$535 million by 2026, growing at a compound annual growth rate (CAGR) of 11.4 percent during the period 2021-2026.

The report states the Philippines is considered one of the emerging markets in Southeast Asia, (SEA), with multiple technology companies planning to build data centres in the country.

There has been increased interest in the Philippines market among Singapore-based data centre operators. 

In December last year, Digital Edge announced that it had formed a joint venture to construct and operate a 10 MW data centre in Manila, with a capital commitment in excess of US$100 million.

In early February, SpaceDC announced that it is developing a 72 MW hyperscale campus in the eastern Greater Manila area and is looking to invest US$700 million.

Global platform

The current investment gives STT GDC entry into the Philippines market.

In Asia, it has 129 data centres on its global platform, located in Singapore, India, China, Thailand, South Korea and Japan.

Its presence in the UK gives it a total of 140 data centre facilities globally that it can offer to its customers. 

More than 43 percent of STT GDC’s data centres operate with power derived from renewable sources, with an ambitious 2030 carbon-neutral target for all its data centres, the joint release said. 

Globe, through its wholly-owned subsidiary, Innove Communications, has been operating data centres in the Philippines since 2001, Ernest Cu, Globe’s president and CEO said.

It has expanded its portfolio across the Philippines, serving its internal needs, as well as those of local enterprises and global hyperscalers, he added.

Cu added the deal would allow Globe and Ayala to partner with “one of the world’s largest data centre operators”.

“Together with STT GDC’s deep expertise and experience in developing, owning and operating data centres globally and AC’s significant business reach… we believe that this joint venture will be well-positioned to become the leader in the data centre space in the Philippines,” Cu said.

Saying the STT GDC was “thrilled to partner Globe”, Bruno Lopez, the company’s president and group CEO, said it further bolstered the company’s presence within Asia.

“This venture will enhance our offerings to support enterprises as they grow their digital infrastructure in the Philippines and the wider Asia Pacific region,” said Lopez.

Fernando Zobel de Ayala, AC’s CEO said: “We believe we have found in STT GDC the right partner to help us scale up and play a major role in the development of the data centre industry in the country”.

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