Asia-Pacific (APAC): KKR is to pay $807 million for a stake in SingTel's regional data centre operation

On Monday, SingTel announced that KKR will buy a 20% share in its regional data center business for $806.87 million. SingTel and KKR said in a joint statement that the agreement values SingTel's regional data center business at $4.03 billion and will be utilized to develop in Southeast Asian countries like Singapore, Indonesia, and Thailand.

Global investors are buying Southeast Asian infrastructure assets due to the region's growth and consistent, long-term earnings. The investment is part of KKR's Asia infrastructure strategy. The joint statement expects Southeast Asia's data center market to increase by 17% over the next five years, in contrast to 12% for the rest of the world, with $9 billion to $13 billion in investments.

The announcement stated that KKR's investment will advance SingTel's regional data center operations in Southeast Asia, including Singapore, Indonesia, and Thailand, and explore emerging markets, including Malaysia. The customized investment commitment allows KKR to expand its interest to 25% by 2027 at a pre-agreed valuation. The purchase represents KKR's latest commitment to Southeast Asia infrastructure and data center infrastructure globally, joining Pinnacle Towers and Aster Renewable Energy.

The first SingTel-KKR agreement allows SingTel to capitalize on KKR's funds and expertise in investing in data centers and vital telecommunication infrastructure worldwide. In June 2023, Singtel's regional data center operations became part of Digital InfraCo. Singtel's data center portfolio is scheduled to increase from 62 to over 155 megawatts in 2025, with room to scale up to 200 megawatts.

The acquisition should be completed by Q4 2023.