Cromwell Property Group has entered a strategic partnership with Stratus Data Centres, a member of the EXS Capital Group, to establish a new data centre fund holding up to US$1bn (€884m) in assets.
The Stratus Cromwell Data Centre Fund (SCDC), will develop and invest in data centres in Europe and Asia-Pacific. The fund’s first two projects will be in London and Frankfurt.
Cromwell’s chief investment officer, Rob Percy, told IPE Real Assets that Cromwell would be a “meaningful” cornerstone investor in the fund.
Through a separate sidecar, Cromwell’s Singapore-listed CEREIT will take a 50% stake in the London and Frankfurt projects.
He said that, as SCDC itself had much larger aspirations than Europe, CEREIT would co-invest in a sidecar on an asset-by-asset basis only in European projects.
Percy said Cromwell, Stratus and EXS would jointly raise the capital for the fund. The first raising would be for US$300m.
He said: “We want to bring investors in gradually as we fill the (development) pipeline. We will try to balance the equity commitment as we roll out the platform.”
Eric Solberg, chairman of Stratus and EXS, told IPE Real Assets: “We have a number of other investors who are keen on this (asset class).
“With that sorted out, we will go back to our other investors, especially those from markets where we are most active.”
Given development lead-time, Solberg expects the fund to reach its billion-dollar target in around three years.
After London and Frankfurt, the vehicle will look elsewhere in Europe to Dublin and Milan. In Asia, it will look to Tokyo, Manila, Jakarta and Mumbai.
Nigel Clarkson, CEO of Stratus, said: “As a 20-year-plus veteran developing and converting data centres across the UK, Europe, Asia and Australia, I can say that global demand for cloud computing is only going one way – up.
The exponential growth of data created by social media, mobile devices, video streaming and cloud computing has driven unprecedented demand for data centres, he said.
This demand has only been accelerated by the COVID-19 pandemic, pushing more of modern life and business online, Clarkson added.
EXS has been operating out of Asia for 12 years as a private equity real estate specialist. “We don’t invest in assets. We set up platforms like Stratus and establish dedicated management,” Solberg said.
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