Equinix today announced a new $525m joint venture agreement with GIC, Singapore’s sovereign wealth fund, to extend its hyperscale data center program, known as xScale, into South Korea. Specifically, Equinix’s xScale data center joint venture will develop and operate two facilities in Seoul, South Korea, known as SL2x and SL3x, providing more than 45 megawatts of power capacity.
Overall, Equinix owns a 20% equity interest and GIC owns the remaining 80% of the South Korea joint venture company. Finally, the joint venture is expected to close in Q1 2022.
xScale Data Centers in Seoul, South Korea – Equinix, GIC
Equinix and GIC’s xScale joint venture will construct two data centers in Seoul, South Korea. At full build-out, SL2x and SL3x will provide more than 45 megawatts of power capacity. Based on the joint venture’s total funding of $525m, this implies a cost of $11.7m per megawatt to build the SL2x and SL3x facilities.
xScale serves the core workload deployment needs of hyperscale companies, including large cloud service providers. These core workload deployments add to the existing access point footprints of these hyperscale customers at Equinix’s retail facilities (see below). In turn, this architecture enables hyperscale companies to offer direct interconnection, across Equinix’s ecosystem, to their own customers.
Equinix – Retail Data Center Presence in South Korea
Equinix entered South Korea in 2019 with its first retail IBX data center, known as SL1, which is located at 24, World Cup Buk-ro 60-gil, in the Mapo district of Seoul, South Korea. Specifically, the SL1 facility is proximate to Seoul’s central business district and the Yeouido financial district.
Presently, Equinix’s SL1 offers 550+ sellable cabinets across 19.1k sqft (1.8k sqm) of colocation space. Notably, Equinix’s SL1 is a leased facility with an initial term of 5 years and three 5-year renewal options. Finally, as of December 31, 2020, Equinix’s SL1 Seoul data center had a gross carrying value of $70.5m.
At the facility, connectivity is enabled to hyperscale providers, including Alibaba Cloud, Amazon Web Services (AWS), Google Cloud, Microsoft Azure, and Oracle Cloud. Importantly, Equinix’s xScale expansion in Seoul, South Korea, provides these hyperscale companies with capacity to continue growing their footprint.
xScale Joint Ventures – Equinix, GIC, PGIM Real Estate
Equinix’s new South Korea joint venture with GIC builds on its earlier partnerships with GIC and PGIM Real Estate. At full build-out, the total investment across Equinix’s xScale data center joint venture with both GIC (Europe, Asia-Pacific, and the Americas) and PGIM Real Estate (Australia) will be over $8bn, across 36 facilities, with 720+ megawatts of power capacity.
xScale Operational Portfolio
Presently, 7 xScale data centers are operating in Asia-Pacific, EMEA, and Latin America. Specifically, these include Frankfurt 9x-1, London LD11x-1, London LD13x, Paris PA8x, Paris PA9x, São Paulo SP5x-1, and Tokyo TY12x-1.
As of Q4 2021, Equinix had cumulatively leased 133 megawatts of its xScale capacity.
South Korea Data Centers – Competitors
Over the past 12 months, notable data center operators have been making inroads into South Korea:
- Digital Realty: opened Digital Seoul 1 (ICN10) which comprises 12 megawatts of critical IT capacity across 22k sqft in Seoul’s Sangam Digital Media City. Additionally, Digital Realty announced plans to develop Digital Seoul 2 (ICN11) which has the potential to offer 64 megawatts of critical IT capacity across 970k sqft
- Digital Edge: backed by Stonepeak Infrastructure, Digital Edge acquired one data center in Seoul (Gangnam) and a cable landing station in Busan (Centum City), South Korea
- STACK Infrastructure: as part of its Asia-Pacific expansion, South Korea has been named as a target market