JLL advises on major Japan data centre transaction in Saitama, Greater Tokyo

SINGAPORE, 30 June 2021 - JLL (NYSE: JLL) today announced that it advised on a major data centre transaction in Saitama, located in Greater Tokyo, which involved the sale of an asset for redevelopment into a nearly 100 megawatt (MW) data centre campus. This project marks the entry of Princeton Digital Group (PDG) into Japan.

JLL provided a suite of integrated solutions to the principals involved in the transaction, bringing together its Data Centre Specialty Group, Capital Markets, Project and Development Services, and Integrated Facilities Management teams, to facilitate the desired outcomes.

“Data centres remain one of the most in-demand regional asset classes for both investors and operators, but transactions in this space come with numerous considerations and complexities. JLL’s understanding of the workings of investment aspects of data centres, the technical requirements, and our relationships with data centre operators demonstrates our unique ability to bring together expertise across service lines and borders,” says Rohit Hemnani, Chief Operating Officer and Head of Alternatives, Capital Markets, Asia Pacific, JLL.

This unique transaction demonstrates that supply of data centre capacity in Greater Tokyo is expanding to meet demand. The Greater Tokyo data centre landscape is characterized by a broad variety of operators, including local telecommunications providers and system integrators. Increasingly, via an open market structure, foreign operators are being encouraged to enter and compete in this large domestic market.

In recent times, the establishment of data centres has been more popular in the Inzai, while traditionally, capacity has been concentrated in central Tokyo. However, the procurement of additional power capacity in a timely manner is increasingly challenging in these districts. According to JLL, the Saitama area offers unique advantages in terms of scale and speed to market and is well positioned to serve expansion needs of hyperscalers.

“Saitama has all the key ingredients required to evolve into a major hub for the fast-growing Japan data centre market. A number of Japanese operators have already established a data centre footprint in Saitama, and this district is relatively fertile ground for international operators. We are delighted to be part of this maiden deal for PDG,” says Bob Tan, Executive Director, Alternatives, Capital Markets, Asia Pacific, JLL.

Saitama prefecture is home to a diverse manufacturing and research and development base, presenting meaningful expansion opportunities for data centre operators and end-users.

“Saitama’s position approximately 30-50km from both the Inzai district and Tokyo CBD provides a natural geographical diversification, and it’s also well served in terms of fibre network connectivity. We are seeing several more operators expressing significant interest in this location,” added Fuminori Asaki, Senior Director, Capital Markets, Japan, JLL.

This transaction follows JLL’s recent advisory on a landmark data centre asset transaction in Osaka, whereby ESR Cayman Limited (“ESR”), the largest Asia Pacific focused logistics real estate platform, acquired a key data centre and excess land to build on their Japan footprint.