By: Asia Business Outlook Team | Monday, 18 September 2023
Singapore Telecommunications (Singtel) announced on Sept 18 that global investment firm KKR will purchase a 20% stake in Singtel's regional data centre business for S$1.1 billion (US$806.87 million).
The transaction values Singtel's overall regional data centre business at S$5.5 billion (US$4.03 billion), and the funds will be used to expand the data center's business across Southeast Asian markets such as Singapore, Indonesia, and Thailand, according to a joint statement from Singtel and KKR.
"Robust digital infrastructure... will play a crucial role in enabling Southeast Asia's flourishing digital economy, and Singapore is well-placed to serve as a central hub for the region," said David Luboff, partner and head of Asia-Pacific infrastructure at KKR, in a statement.
The transaction comes at a time when global investors are increasingly interested in Southeast Asia's infrastructure assets, drawn by the region's growth prospects and the sector's stable and long-term returns.
The investment is part of KKR's Asia infrastructure strategy.
According to the joint statement, the Southeast Asia data centre market is expected to grow by 17% over the next five years, compared to 12% for the rest of the world, with investments ranging from US$9 billion to US$13 billion.