The $1-billion China-ASEAN Investment Cooperation Fund II (CAF II) has invested in Singapore-based data centre operator Racks Central to support its Southeast Asian expansion, according to an announcement.
Financial details of the transaction were not disclosed.
ESR, the Asia-Pacific real assets manager acting as sub-investment adviser to CAF II, said on Monday the investment would help Racks Central expand beyond its home market, starting with a large-scale development in Johor, Malaysia.
Founded in 2014, Racks Central operates a 12-megawatt colocation facility in Singapore and is developing a data centre campus in Johor comprising four facilities with a planned combined capacity of up to 510 MW.
According to the company, the first phase of the Johor campus, a 90-MW facility in Pasir Gudang, is expected to be ready for service by the first quarter of 2027.
Rocks Central founder and CEO Bobby Wee welcomed the partnership with ESR and CAF II.
“Their capital commitment and infrastructure expertise will support our ambition to develop a seamless, AI-ready data centre corridor across Southeast Asia, enabling our customers to scale efficiently as regional digital demand continues to grow,” Wee said.
Racks Central said sustainability features, including energy-efficient designs and advanced cooling systems, are being incorporated into its developments, although it did not provide further details.
CAF II is a $1-billion investment vehicle focused on promoting economic cooperation between China and ASEAN countries.
ESR, which has a presence across the Asia-Pacific region, said it has a data centre development pipeline exceeding 3 gigawatts.
The companies did not indicate whether the investment would fund additional projects outside Malaysia or whether further capital raises are planned.
The deal underscores growing investor appetite for data centre assets in Southeast Asia, where rising AI adoption, cloud computing and digitalisation are driving demand for computing capacity.
“The rapid acceleration of AI adoption and digital transformation is fundamentally reshaping data centre requirements across Asia-Pacific,” said ESR co-founder and co-CEO Jeffrey Shen.
In April, ESR agreed to set up a 1.6 billion yuan ($235 million) fund with two Chinese insurance groups, according to an announcement.
The fund is expected to acquire two of ESR’s multi-storey logistics and industrial assets in Shanghai and Suzhou, subject to customary conditions.
