Colony Capital, through its flagship private equity fund, Digital Colony Partners II, entered Asia for the first time in Q4 2020, with investments in Edgepoint Infrastructure and AgileDC. Specifically, in Asia, Digital Colony is investing in the digital infrastructure sectors of towers and hyperscale data centers. Indeed, Colony Capital considers Asia to be a dynamic new frontier in which it is very active, evaluating new opportunities.
Colony Capital bases its Asia operations out of its Singapore office and has a dedicated team of five digital infrastructure investment professionals covering the market. Below we review Digital Colony’s investments in Edgepoint Infrastructure and AgileDC.
Edgepoint Infrastructure – Overview of Colony’s Investment
Edgepoint Infrastructure is a tower platform focused on developing, acquiring, and operating macro towers and distributed antenna systems (DAS) in the Southeast Asia region. Headquartered in Singapore, Edgepoint Infrastructure currently owns 4.0k towers across Southeast Asia.
Digital Colony expects Edgepoint Infrastructure to capitalize on Southeast Asia’s 10%+ organic revenue growth rates for towers. Additionally, with additional capital the company will be able to scale through sensible tower M&A entry multiples and attractive build-to-suit (BTS) economics. Indeed, Edgepoint Infrastructure has already begun building towers in Southeast Asia.
Overall, Digital Colony considers that the Southeast Asia towers market offers a more attractive risk-return profile compared to other global tower markets. In turn, at a terminal state, Edgepoint Infrastructure could amass a portfolio of up to 50k towers across the Southeast Asia region.
Edgepoint Infrastructure is led by Suresh Sidhu, who previously was Chief Executive Officer of edotco Group. Specifically, edotco is Southeast Asia’s largest tower infrastructure company, managing over 30k towers across the region. Additionally, Sidhu was previously the Chief Corporate & Operations Officer (CCOO) of Celcom Axiata Berhad. Prior to this role, he was a Group Chief Officer at Dialog Axiata.
AgileDC – Overview of Colony’s Investment
AgileDC is a hyperscale data center platform pursuing greenfield data center development activity across seven countries in Asia. Specifically, AgileDC currently has two projects under construction in Japan, with sites in both Tokyo and Osaka. Additionally, the company is exploring opportunities to enter five additional markets in Asia.
Overall, Colony Capital considers Asia to currently be the strongest growth market in the world for hyperscale data center investments.
AgileDC is led by its President and Co-Founder, Giles Proctor, who previously ran global colocation procurement and data center expansion planning for Amazon Web Services (AWS). Additionally, Proctor previously led the development of data center assets for subsea cable operator Pacnet in Hong Kong. Prior to this role, he was the head of data center development across Asia-Pacific for Equinix.
Joint Venture Formation
In February 2021, Digital Colony, through AgileDC formed a joint venture with Goldman Sachs, through its Koguma DC Holding entity. Indeed, this joint venture will fuel the growth of AgileDC through the construction, ownership, and operation of greenfield data centers. Additionally, the joint venture also has the mandate to acquire data center assets in Japan.
Colony Capital and Digital Infrastructure in Asia
Beyond Edgepoint Infrastructure and AgileDC, Colony Capital is actively seeking ways to deploy further capital into additional digital infrastructure sectors in Asia.
Firstly, Colony Capital finds dark fiber in certain parts of Asia as an attractive investment opportunity. Secondly, the firm notes that it has begun to evaluate fiber-to-the-home deals in Asia. Finally, edge computing is a business in Asia that remains in a very nascent phase, with a significant edge computing opportunity available in the coming years.