A consortium comprising KKR and Singapore Telecommunications (SingTel) has finalised an agreement to invest approximately S$1.75bn ($1.3bn) in ST Telemedia Global Data Centres (STT GDC).  

STT GDC, which is headquartered in Singapore, operates a network of more than 95 data centres across 11 geographies.  

The company’s data centre portfolio currently supports more than 1.7GW of IT load capacity. 

The initial investment by the consortium will be through redeemable preference shares, with detachable warrants attached.  

Should the consortium exercise these warrants fully, an additional investment of roughly $920m will follow. 

The funds from this transaction will be used to enhance STT GDC’s footprint in existing markets and supporting its growth through both organic and inorganic strategies.  

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Despite the new investment, ST Telemedia will remain the majority shareholder of STT GDC. 

An STT GDC spokesperson told Reuters that the KKR-SingTel consortium’s investment will result in an 18.3% ownership stake in STT GDC.  

The finalisation of this deal depends on meeting specific conditions, such as securing required regulatory approvals. 

KKR Asia Pacific co-head and head of Asia Pacific infrastructure David Luboff said: “Data centres serve as an important backbone of the digital infrastructure that enables an increasingly digital economy and many critical industries globally.  

“Our investment in STT GDC is a rare opportunity to support the growth of a leading data centre platform with a terrific track record of growth and significant potential, whilst deepening our existing collaboration with Singtel.” 

Singtel group CFO Arthur Lang said: “We see digital infrastructure, particularly data centres, as a growth asset and compelling investment with the remarkable rise of the sector driven by rapid digitalisation and AI adoption around the world.  

“Given our joint expertise in digital infrastructure, we are pleased to participate in this fundraising with KKR, deepening our relationship since its investment in our regional data centre arm Nxera last September.”   

This development is indicative of the heightened interest and demand for data centres in the Asia Pacific region, driven by advancements in artificial intelligence (AI).  

Earlier in June 2024, Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Aziz announced that ByteDance plans to invest approximately $2.1bn (RM10bn) in Malaysia to establish an AI hub.  

In May 2024, Microsoft disclosed its plans to open its first data centre in Thailand, responding to the country’s increasing demand for cloud and AI services.