KKR to Acquire 20% Stake in Singtel’s Regional Data Centre Business

Global investment firm KKR will purchase a 20 percent stake in Singtel’s regional data centre business for S$1.1 billion (approximately US$800 million). This strategic move values Singtel’s overall regional data centre business at a substantial S$5.5 billion, highlighting its promising growth trajectory.
Singtel’s regional data centre business offersUnder the agreed terms, KKR retains the option to increase its stake to 25 percent by 2027 at a pre-agreed valuation, reinforcing their collaborative efforts. The partnership seeks to capitalize on KKR’s wealth of experience and investments in data centres and critical telecommunication infrastructure on a global scale, in addition to providing essential capital.

The proceeds from this transaction will be allocated to accelerate the expansion of Singtel’s regional data centre business across ASEAN markets, including Singapore, Indonesia, and Thailand. The company is actively exploring opportunities in burgeoning markets like Malaysia and others, Singtel, Asia’s leading communications technology group, said.

Operating under the Digital InfraCo unit established in June 2023, Singtel’s regional data centre business has exhibited steady growth, anchored by its position as one of the largest operators in Singapore. With an existing data centre portfolio in Singapore and upcoming projects, the combined capacity is projected to exceed 155MW by 2025, offering flexibility for further scaling up to more than 200MW.

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

Arthur Lang, Group CFO at Singtel, added, “The investment by KKR crystallizes the latent value of our data centre assets. With more than S$6 billion being unlocked since we embarked on our strategic reset two years ago, we continue to focus on unlocking value for our shareholders.”

David Luboff, Partner and Head of Asia Pacific Infrastructure at KKR, highlighted, “We 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.”

The Southeast Asia data centre market is expected to witness a robust 17 percent growth over the next five years, outpacing the global average of 12 percent. Investments in the region are estimated to range from US$9 billion to US$13 billion. The surge in data consumption, the transition of enterprises to the cloud, and the rapid rise of AI in the region are expected to drive demand, surpassing the available supply. Malaysia, Indonesia, and Thailand are anticipated to experience a significant increase in data centre capacity.

KKR’s investment aligns with its broader Asia infrastructure strategy and marks its latest venture into Southeast Asia infrastructure and data centre investments. Previous infrastructure investments in the region by KKR include Pinnacle Towers, First Gen, and Aster Renewable Energy, focusing on digital infrastructure and renewable energy.

On a global scale, KKR has established a strong presence in the data centre infrastructure sector through investments in renowned companies like CyrusOne, Global Technical Realty, and CoolIT Systems, showcasing their commitment to shaping the future of data centre solutions worldwide.