Singapore-based CapitaLand Investment Limited (CLI) has officially entered the Japanese data centre market with the acquisition of a land parcel in western Tokyo for the development of a high-tech campus worth approximately €465 million. This move marks a strategic expansion in Asia and reflects the growing importance of digital infrastructure in real estate investment portfolios.
Strategic Acquisition in a Promising Region
The newly acquired site, located in Chiba Prefecture near Tokyo, is part of CapitaLand’s plan to diversify and strengthen its presence in key Asian markets. Western Tokyo was chosen for its status as an emerging digital infrastructure cluster, thanks to its logistics advantages, stable energy supply, and proximity to Japan’s financial hub.
Initial plans outline a multi-phase data centre campus spanning over 60,000 square meters, designed to support up to 100 MW of IT load. The first phase is expected to be completed in the second half of 2026.
Strengthening Presence in Digital Real Estate
The Japan project builds upon CapitaLand’s growing digital infrastructure portfolio across Asia, which already includes data centre developments in Singapore, China, and South Korea. According to CLI CEO Lee Chee Kheong, Japan is “one of the most mature and fastest-growing data centre markets in the region, making it a priority for long-term investment.”
CapitaLand views data centres as a critical growth driver. According to CBRE, investment volume in data centres across Asia-Pacific rose by 35% in 2024, surpassing €14 billion.
ESG and Sustainable Technology Focus
CapitaLand has emphasized that the project in Japan will focus on sustainability and energy efficiency. It aims for international green building certifications such as LEED Gold and BCA Green Mark. Engineering features will include:
- heat recovery systems,
- water-saving technologies,
- integration with renewable energy sources.
The company is also negotiating Power Purchase Agreements (PPAs) to supply the majority of the centre’s energy needs from green sources.
Japan’s Data Centre Market: High Potential and Competition
Japan is one of the world’s fastest-growing data centre markets. Structure Research estimates that local demand for data processing and storage is growing by 12–15% annually, driven by:
- rapid adoption of cloud computing,
- digital transformation of financial and public services,
- the rise of AI and IoT technologies.
However, the market is competitive. Major players like Equinix, NTT, Digital Realty, and Microsoft are already active in Japan. Experts note that limited land availability and high property costs pose significant entry barriers, making early market access a strategic advantage.
Financing and Investment Structure
The Tokyo project is funded through a mix of CapitaLand’s internal capital and the CapitaLand Data Centre Partners fund, launched in 2022. This structure allows CLI to mitigate risk while scaling its presence in new jurisdictions.
The fund’s investor base includes institutional partners from Europe, North America, and the Middle East, all seeking long-term exposure to high-yield, low-correlation real estate assets.
Impact on the Regional Real Estate Market
Experts believe projects like CapitaLand’s Tokyo data centre will reshape regional real estate dynamics, stimulating infrastructure growth, job creation, and support industries ranging from telecommunications to logistics.
Furthermore, the increased activity of international investors in Japan’s data centre market indicates that infrastructure real estate is becoming central to modern investment strategies in the digital age.
Expansion Prospects
CapitaLand has already expressed interest in identifying additional sites in Osaka and Nagoya, where demand for digital infrastructure continues to climb. The company is also considering modular data centre formats and innovative cooling technologies, which would allow it to cater to a broad client base—from hyperscale providers to enterprise customers.
CLI emphasizes that Japan will be a cornerstone of its pan-Asian digital real estate platform, alongside existing projects in Singapore, Shanghai, and Seoul.
Conclusion
CapitaLand’s entry into the Japanese market with a €465 million data centre project underscores the rising significance of digital infrastructure as a core investment theme. This bold move enhances the company’s strategic position in Asia and offers new opportunities for institutional capital seeking sustainable, tech-driven, and long-term yield.
Amid a global shift to a digital economy, such initiatives are poised to redefine the landscape of commercial real estate across Asia and beyond.
