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Warburg Pincus-Backed ESR Raises Over $1 Billion To Accelerate Data Center Expansion Across Asia Pacific

ESR Cayman—which counts Warburg Pincus, Singapore tycoon John Lim and billionaire Chew Gek Khim’s Straits Trading as major shareholders—raised over $1 billion to bankroll the expansion of its data center footprint across Asia Pacific.

The ESR Data Centre Fund 1 received fresh capital commitments from the world’s largest institutional investors, including sovereign wealth and pension fund, while ESR partners will have an option to contribute another $1.5 billion in equity, the Hong Kong-listed asset manager said in a statement.

“We are looking to play into the critical need for digital infrastructure in a big way going forward by leveraging our core competitive advantages,” ESR cofounders and co-CEO Jeffrey Shen and Stuart Gibson said in a statement.

Separately, ESR said plans to raise another $1.5 billion from its discretionary capital sleeve, which together with the upsize option from partners would give the data center fund a total investment capacity of as much as $7.5 billion over time.

To capitalize on the Asia-Pacific region’s rapid digital transformation, ESR is building data centers with a combined capacity of 300 megawatts in prime locations across the region. Its biggest project in Osaka will have a gross asset value of more than $2 billion when completed next year.

With the growing use of e-commerce, video conferencing, social media and cloud computing platforms, investments in data center projects across Asia Pacific reached an all-time high of $4.8 billion in 2021, more than double the previous record of $2.2 billion set the previous year, according to property consultant CBRE.

ESR has transformed itself into the largest new economy real estate platform in Asia Pacific following the acquisition of Singapore’s ARA Asset Management in January. It currently has more than $140 billion of assets under management (of which 43% are new economy assets) across the region and counts e-commerce giants such as Amazon, Alibaba, Coupang and JD.com—also a shareholder in ESR—among its biggest clients.