Lendlease, an Australian real estate investor, today announced the launch of its first hyperscale data center development project in Tokyo, Japan, via its joint venture called Lendlease Data Centre Partners (LLDCP). Upon completion of all phases, the project will have a gross development value (GDV) in excess of $600m (A$800m), making the data center one of the largest in Japan.
Overall, the Lendlease Data Centre Partners (LLDCP) joint venture is funded 20% by Lendlease and 80% by a Singaporean institutional investor.
Tokyo, Japan Data Center – Lendlease
Lendlease’s site is located in Greater Tokyo, comprising 355k sqft (33.0k sqm) of land. More specifically, local reports indicate that the site is in Saitama Prefecture, which is 18.5 miles (30 kilometers) north of central Tokyo. Indeed, this is a similar location to Princeton Digital Group’s 97-megawatt data center development in Tokyo.
Lendlease will undertake a phased development to deliver a total of 645k+ sqft (60.0k+ sqm) of gross floor area. Specifically, construction will commence later in 2021, with completion of the initial phase by early 2024.
Furthermore, Lendlease’s indicative conversion timing shows that it expects to continue developing the remaining phases of its data center until calendar-year 2026.
Through its Tokyo, Japan data center, Lendlease will target hyperscale companies (i.e., cloud service providers). Notably, to-date, close to 50% of the site has already been pre-leased.
Lendlease Data Centre Partners (LLDCP) – Joint Venture
Established in June 2019, the Lendlease Data Centre Partners (LLDCP) joint venture has an initial equity commitment by the parties of $500m. Therefore, Lendlease’s 20% equity commitment to the joint venture implies a $100m funding requirement for the firm. Correspondingly, the Singaporean institutional investor will fund the remaining 80% or $400m equity commitment.
In aggregate, including 50% leverage, via debt financing, the partnership intends to invest $1bn in the data center sector.
Geographically, the joint venture’s mandate covers Australia, China, Japan, Malaysia, and Singapore. Further, Lendlease Data Centre Partners will invest in both completed assets and new development opportunities.
Under the joint venture, Lendlease will provide services including development, construction, property, and investment management.
Risk and Return
Lendlease Data Centre Partners (LLDCP) designates itself as a Core Plus type of fund.