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Gaw Capital’s data center platform in China grows to $1.3bn

ADIA is the largest investor in the vehicle with additional commitments made by other global institutional investors and the firm's flagship fund.

Hong Kong-headquartered private equity real estate manager Gaw Capital Partners has corralled $1.1 billion for its data center platform in China as it seeks to capitalize on growing internet usage and data storage in the country after the outbreak of covid-19, PERE can reveal exclusively.

PERE understands that the firm’s Internet Data Center platform has corralled $1.1 billion since it was launched in October last year, according to three market sources. Total commitments are expected to grow to $1.3 billion in the next few weeks. Gaw has not publicly disclosed the target size of the vehicle.

PERE understands that Abu Dhabi Investment Authority is the largest of up to five global investors in the platform, and all of them are existing investors with the firm, according to one of the sources. Gaw’s sixth flagship opportunity fund, Gaw Capital Real Estate Fund VI, also owns up to a 10 percent stake in the platform.

Two sources told PERE that the capital has been fully committed to five projects. Targeting an opportunistic return of over 20 percent, the IDC platform can invest in both development projects and existing assets in China.

Gaw declined to comment on the platform’s fundraising progress and its return target.

“The demand for data centers has been accelerated after the outbreak of covid-19 and the market has obviously become more competitive than before. We are fortunate to be one of the earlier batches of real estate managers to enter the market and to be able to partner with top operators in the country,” said Christina Gaw, managing principal and head of capital markets for Gaw Capital Partners.

The private equity real estate firm has partnered with two operators under the platform. One of them is Centrin Data, an internet data center developer and operator of hyper-scale IDC projects in China. The platform’s first seed project is the Huaqiao Project, which is located on the outskirts of Shanghai and is directly linked to the city’s ‘National Level’ internet exchange point, according to a release.

It is understood that the firm is also actively looking at data center opportunities outside of China in South-East Asia, Korea and Japan. “Most of the global investors have already had data center exposure in the US and Europe. So naturally they will look at Asia as the next growth destination,” Gaw explained.