A rendering image of a data center to be built in Menteng Atas, Setiabudi in Jakarta
Korea Investment Real Asset Management Co. and Indonesian conglomerate Sinar Mas have set up a joint venture to build a hyperscale data center in a central business district of Jarkarta in a 400-billion-won ($300 million) project, according to people with knowledge of the matter on Tuesday.
They each will inject 70 billion won ($53 million) into the 50:50 JV, Kuningan Mas Gemilang (KMG). Korea Investment Real Asset is tapping outside investors to raise the money for its commitment.
In addition, they will raise 260 billion won in project financing around the third quarter of next year, upon winning approval for the construction that is scheduled for completion in 2027.
They have purchased the land and submitted a request for approval to the relevant authorities in Indonesia.
The data center with an 18-megawatt capacity will be built on an 8,516-square-meter plot of land with a floor area of 44,194.7 square meters. With 11 floors above land and one basement level, it will be located in Menteng Atas, Setiabudi in Jakarta.
Sinar Mas, founded in 1938, is one of Indonesia’s four largest conglomerates. It engages in financial services and real estate development, as well as in agricultural, food, pulp, energy and telecommunications. It will provide real estate development know-how and infrastructure for the data center project.
Korea Investment Real Estate, a unit of Korea Investment Holdings Co., is betting on the growth potential in Indonesia’s IT market that is forecast to grow at an annual rate of 23% on average to 9.4 trillion won by 2027 from the estimated 4.2 trillion won in 2023, according to research firm Gartner.
It is discussing with Sinar Mas to build and operate additional data centers in Indonesia, said the sources.
Meanwhile, Sinar Mas in March has agreed to join hands with LG CNS Co., a South Korean data center operator, to manage data centers for corporate customers and offer cloud storage services.
By Byung-Hwa Ryu
hwahwa@hankyung.com
Yeonhee Kim edited this year
