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Digital Edge plans projects in India, Thailand

After adding eight data centres to its portfolio over the past year, Singapore-based Digital Edge’s top executive is mapping out a path to new markets in India and Thailand as the company aims to more than double its capacity by 2028.

Digital Edge chief executive officer Samuel Lee told Mingtiandi that the two-year-old company’s goal is to grow its portfolio to 500 megawatts in the next five years, from 210 megawatts currently, with Asia’s third-largest economy playing a major role in that expansion.

“When we talk about Asia, we cannot ignore one of the biggest tech markets which is India so we are definitely looking at that market. It is a very big market for data centers, there’s lots of players and population-wise, it is a big country and internet infrastructure basically follows the population,” he said in an interview last week.

Backed by US private equity firm Stonepeak, Digital Edge’s race to keep up with fast-growing demand for rack space from major cloud providers is also motivating its latest expansion plans in Southeast Asia, as it looks to establish a Thailand foothold after launching Philippine and Indonesian initiatives in the past year.

Chasing Cloud Clients
Since entering the Indonesia market in 2021 via the purchase of a controlling stake in PT Indointernet Tbk, Lee says that Digital Edge has experienced strong demand from US and Chinese cloud providers, with Bangkok emerging as its next Southeast Asian destination due to its importance to these tech giants.

“The general rule is we will follow where our customer wants us to go. If you follow the news about the announcement of the Google Cloud provider, you will find a lot of them just announced they are going into Bangkok,” he added. “When a market has those types of attractions, obviously it will be on our radar screen.”

In August, the cloud computing service arm of Google announced plans to set up its inaugural cloud region in Thailand, with Chinese tech giants Alibaba and Tencent having already established presences in the country.

Elsewhere in Southeast Asia, Lee is seeing growth potential in underserved, Internet-savvy markets like the Philippines. The firm took on the Manila market last year with a plan to set up a a 10 megawatt server facility just outside the capital, with Lee now hinting of a possible second project in the country.

“I’m sure our second data center in the Philippines will be far bigger than just 10 megawatts because the market is just growing very fast,” he said.

4 Deals In 12 Months
While Lee declined to disclose further details on its India expansion, Digital Edge’s entry to the subcontinent will see it joining other Singapore-based players, as well as private equity titans like Blackstone, in venturing into the country’s data centre space.

Blackstone last week announced the launch of Lumina CloudInfra, its first wholly owned data centre platform in Asia, with the regional initiative planned to deliver around 600 megawatts across cities including Mumbai, Chennai, Hyderabad, Pune and Noida.

Last year, Princeton Digital Group started constructing a 48-megawatt campus in Mumbai while SGX-listed Ascendas India Trust entered the local scene in mid-2021 with a $162 million investment to build its first data centre in the same city.

Digital Edge, which Stonepeak formed in cooperation with a set of industry veterans in September 2020, has added 191 megawatts to its portfolio over the past 12 months and now has has 15 operational facilities and development projects across Japan, South Korea, mainland China, Indonesia and the Philippines.

The company’s latest addition was its second project in Jakarta which broke ground in September and is slated to deliver 23 megawatts of load by 2024, with Digital Edge also having announced a 120-megawatt campus project in South Korea in April.

With rising interest rates curtailing the ability of many industry players to set up new projects after a period of record growth, Lee said Digital Edge’s backing from Stonepeak, coupled with a solid customer base in Japan, Korea and Indonesia, puts the Singapore operator in a favourable position regarding possible acquisitions of smaller players as the Asian data centre market begins to consolidate.

“Companies with one asset in individual countries are being bought out… this is an interesting trend because it means there’s some opportunity for us as well to get into a new market, like acquiring an existing player that is at a very early stage,” he said. Mingtiandi

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