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.
Each side will inject 70 billion won ($53 million) into the 50:50 JV, called 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, after winning approval for the construction that is scheduled to be completed 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. Its total floor area of 44,195 square meters will be spread over 11 above ground floors 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 the agricultural, food, pulp, energy and telecommunications sectors. It will provide real estate development expertise and infrastructure for the project.
Korea Investment Real Estate, a unit of Korea Investment Holdings Co., is betting on the growth potential in Indonesia’s IT market. The market is forecast to grow at 23% annually, on average, to 9.4 trillion won by 2027 from an estimated 4.2 trillion won in 2023, according to research firm Gartner.
Korea Investment is also holding discussions with Sinar Mas to build and operate additional data centers in Indonesia, the sources said.
Meanwhile, Sinar Mas in March agreed to join hands with LG CNS Co., a Korean data center operator, to manage data centers for corporate customers and offer cloud storage services.
