KKR to Acquire Stake in SingTel’s Regional Data Centre Unit for USD 807 million

October 2023

KKR, a global investment firm, is set to acquire a 20% stake in Singapore Telecommunications (SingTel)’s regional data center business for SGD 1.1 billion (USD 0.8 billion), placing the overall value of SingTel’s regional data center business at USD 5.5 billion. The proceeds from this deal will be utilized to expand the data center business in Southeast Asian markets, including Singapore, Indonesia, and Thailand. This investment is in line with KKR’s Asia infrastructure strategy and demonstrates the growing demand among global investors for infrastructure assets in Southeast Asia, driven by the region’s growth potential and the sector’s stable, long-term returns.

Southeast Asia’s data center market is predicted to grow by 17% over the next five years, significantly outpacing the global average of 12%, with investments in the range of USD 9 billion to USD 13 billion anticipated for the region. Marked as a part of its Asia infrastructure study, KKR’s investment is slated to accelerate the expansion of SingTel’s regional data center business and potentially explore new markets such as Malaysia. The agreement also allows KKR to increase its stake to 25% by 2027 based on a pre-agreed valuation.

This marks KKR’s latest investment in Southeast Asia infrastructure and data center infrastructure worldwide, adding to its existing regional investments. The transaction offers SingTel access to KKR’s expertise in data center and telecommunication infrastructure investments, along with capital. Singtel’s data center portfolio is projected to reach a total capacity of over 155 megawatts in 2025, with further room for expansion to more than 200 megawatts from the current 62 megawatts. The deal is expected to close in the fourth quarter of 2023.

(Source: Business Today)

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