Macquarie named as preferred bidder for Kakao Data Center

[Courtesy of Macquarie]

Global infrastructure investment firm Macquarie has been selected as the preferred bidder for Kakao’s data center, reflecting the growing attractiveness of data centers as investment opportunities due to increasing demand for artificial intelligence (AI) and cloud servers.

According to sources on Wednesday, IGIS Asset Management has recently designated Macquarie Asset Management as the preferred bidder for the Kakao data center in Hanam, Gyeonggi Province. Macquarie plans to integrate this data center into its portfolio through its publicly listed infrastructure fund, Macquarie Infrastructure.

IGIS Asset Management put the asset, located in Pungsan-dong, Hanam, on the market last year.

After selecting JLL Korea as its sales advisor, IGIS Asset Management began the sale process in earnest. The data center was developed directly by IGIS through its fund, with Samsung C&T Corp. handling construction and LG CNS Co. responsible for design and operations. Woori Bank is the trustee for the real estate.

The data center is currently leased with Kakao occupying 92 percent and LG CNS 8 percent of the space. Following the major service outage in October 2022, Kakao chose this facility to enhance its disaster recovery capabilities.

Real estate investment banking experts estimate the sale price of the Hanam data center to range between 800 billion won ($580 million) and over 1 trillion won.

The facility spans nearly 42,000 square meters across two underground and ten above-ground floors, with a total capacity of 40MW and an IT load capacity of 25.44MW.

Despite the increasing server demand making data centers a promising investment in the real estate market, high interest rates, rising construction costs, and a lack of acquisition funds have hampered active transactions.

However, with Macquarie Asset Management’s first venture into the domestic data center market, industry insiders are optimistic about a potential uptick in data center transactions.

Headquartered in Australia, Macquarie Group has a long track record of investing in infrastructure. The firm demonstrated its commitment to data center investments in 2020 by acquiring data platform AirTrunk through its Asia Infrastructure Fund.