Keppel, Salim Group enter JV to develop and operate an Indonesia data center

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The Salim Group and Keppel Corp. have entered a 60:40 joint venture to develop and operate a high-availability data center in Bogor, about 35 km from Jakarta, Indonesia, the companies said in a filing to SGX before the market open on Monday.

The joint venture will be through the Alpha Data Centre Fund, managed by Alpha Investment Partners and Keppel Data Centres Holding to develop IndoKeppel Data Centre 1, or IKDC1, it said.

Indonesia’s data center market is one of the region’s fastest growing with a compound annual growth rate (CAGR) of 35 percent, the filing said, citing a PwC report.

Sugiharto Darmakusuma, director of Salim Group, noted in the statement that his company has been investing in fiber connectivity in Indonesia for the past decade.

“With our extensive fiber optic connectivity throughout Indonesia and Keppel Data Centres’ presence across the globe, we believe that we have met a perfect match to take part in the smart industry revolution,” he said, according to the statement.

IKDC 1’s development will be over three phases and will have a gross floor area of around 105,300 square feet with tier 3 concurrent maintainability standards for power and cooling, it said. The data center’s core and shell and its first phase fit-out is expected to be completed by the first half of 2020, it said.

In addition, IKDC 1 and its underlying 3ha land plot will be held by a 60:40 joint venture between the Salim Group and the Alpha DC Fund respectively, it said.

Eventually, the 3ha land plot is expected to be the first phase of a larger 7ha data center campus development to meet expectations for growing demand for data center space in Indonesia, the filing said.

The Salim Group currently operates a data center in Indonesia serving financial institutions and enterprise customers, while Keppel Group owns, develops and operates high-availability data centers across Asia Pacific and Europe, the filing said.

The transaction isn’t expected to have a material impact on earnings per share and net tangible assets per share for Keppel Corp. and Keppel Telecommunications & Transportation for the current financial year, the filing said.

Alpha Investment Partners is a wholly owned subsidiary of Keppel Capital, the asset management arm of Keppel Corp., it said. Keppel Data Centres Holding was formed in 2011 as a 70:30 joint venture between Keppel T&T and Keppel Land to consolidate their data center assets, it said.

Keppel T&T, which is listed on the Singapore stock exchange, is a subsidiary of Keppel Corp., it said.

This article was originally published on Monday 10 September 2018 at 7:48 A.M. SGT; it has since been updated.

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