Koramco targets $7 bn bet on Korea data centers

Koramco Asset Management Co., South Korea’s leading real estate investment firm, plans to invest 10 trillion won ($7 billion) in domestic data centers by 2032, aiming to become the country's largest data center management firm, according to investment banking sources.

With data centers emerging as a compelling alternative asset amid the rise of generative AI and cloud computing, Koramco seeks to raise 5 trillion won in a fund dedicated to data centers by 2028, with the remainder to be funded through debt financing.

On Wednesday, Koramco finalized a mid- to long-term strategy for such investment.

The move follows the March launch of a division that consolidated Koramco's previously scattered data center talent and now oversees the entire investment procedures – from land acquisition and design to construction, operations and asset management.

If completed, the investment of 10 trillion won would make Koramco the only asset manager in South Korea operating data centers with the largest combined power capacity.

It forecast its new data center portfolio to deliver a combined IT-load capacity of 1 gigawatt (GW). IT-load capacity refers to the amount of power consumed by IT equipment such as servers, storage systems and networking devices.

Their power reception capacity, or the total amount of electricity they can draw from the external grid, is projected at 1.4GW.

Koramco is considering launching a REIT backed by its new data center portfolio and listing it on the Korea Exchange. The firm is the country's largest privately owned REIT manager.

Global investors, including Singapore’s sovereign wealth fund GIC and the Canada Pension Plan Investment Board (CPPIB) are also setting their sights on data centers in Asia's No. 4 economy.

According to the Ministry of Trade, Industry and Energy, the number of data centers in South Korea is forecast to more than quadruple to 637 by 2029 from 147 in 2025.

In 2021, Koramco invested in the construction of a landmark data center, the K Square Data Center, in Seoul’s Gasan Digital Complex. The 41,214-square-meter facility is slated for completion by the end of this month.

More recently, the firm has funded additional large-scale data center developments in the Seoul Metropolitan Area and Busan, South Korea’s second-largest city.

Globally, Blackstone, the world’s largest alternative investment firm, is leading the charge in data center investment. In October, it announced that it has invested $100 billion in the asset class, in addition to managing over $70 billion worth of data center assets.

The same month, private equity firm KKR unveiled a plan to invest $50 billion in data centers in partnership with Energy Capital Partners, a US investment firm.

Write to Gyeong-Jin Min at min@hankyung.com

Yeonhee Kim edited this article.