Macquarie Korea Infrastructure Fund (MKIF), the South Korean infrastructure arm of Macquarie Group, has announced its agreement to purchase a 40-megawatt (MW) data center from IGIS Asset Management Co. for 734 billion won ($538.4 million). The hyperscale data center, located in Hanam, just 10 kilometers from the eastern edge of Seoul, boasts a floor area of 41,919 square meters spread across 12 stories.
Korean mobile platform giant Kakao Corp. currently occupies 92% of the data center space, while LG Group’s information tech unit, LG CNS Co., occupies the remaining 8%. The transaction is expected to be completed by mid-September, marking the first development and sale of a domestic data center by a Korean real estate firm.
Macquarie Korea Asset Management Co. (MKAM) Representative Director Suh Boum Sik highlighted the increasing demand for data centers, citing their crucial role in supporting the growth of generative artificial intelligence and cloud services. Suh also emphasized the appeal of the Hanam data center to corporate clients due to its strategic location within the Seoul metropolitan area, which offers stable communication networks and presents challenges in securing additional water sources.
The main Kospi-listed fund, MKIF, plans to allocate a total of 918 billion won for the project, including the purchase price, remaining construction costs for building mechanical, electrical, and plumbing (MEP) systems, and some financing expenses. In order to lower the valuation of the data center, MKIF has chosen to bear the additional burden, resulting in a reduced cap rate in the low-to-mid 6% range. This strategic move is expected to benefit MKIF in future data center deals.
Sources indicate that more data center deals are anticipated in Korea over the next few years, with IGIS, Koramco Asset Management Co., Samsung SRA Asset Management Co., Actis, and Pacific Investment Management Co. planning to put their digital infrastructure assets on the market.