Ares Management closed Japan DC Partners I last week on $2.4 billion, the first Ares strategy to focus exclusively on data centres, and is already committed to bringing online three new data centres across greater Tokyo capable of delivering 240MW of compute capacity.
The value-add fund launched in 2024 and over half of the capital comes from the Canada Pension Plan Investment Board, which invested $1.3 billion. Additional investment came from Singapore-based GLP, the largest shareholder in GCP International before it was acquired by Ares at the start of March 2025.
“This achievement underscores the leading investment and development capabilities that the combined Ares and GCP International platform brings to Japan’s new economy sectors, and we appreciate the meaningful support from the Fund’s investors, including CPP Investments,” said Blair Jacobson, co-president of Ares, in a statement. “With the increasing adoption of AI and cloud computing technologies positioning Japan as a key market in the global data centre ecosystem, we believe this capital will enable Ares to address supply constraints. As we work to introduce this next wave of critical assets, we are confident that the team’s longstanding relationships with key data centre customers and track record as reliable stewards of these assets will position us well as we seek to generate compelling risk-adjusted returns.”
The fund’s investments will be developed and operated by Ada Infrastructure, a global data centre platform acquired by Ares as part of the GCP International transaction.
Former GCP global president and current partner in Ares’ Real Assets Group Michael Steele told Infrastructure Investor that the 70-person Ada team was able to leverage extensive experience in the market to make the data centres a reality.
“In the markets where our Tokyo projects are located, there has been limited new supply delivered or forecasts for it to be delivered in the next few years, and we believe this positions our portfolio very well,” Steele said.
Difficulty meeting demands
Despite a reputation as an especially internet-enabled country home to high-tech industry and a consumer base tuned into the latest developments, Japanese data centre development has had difficulty meeting the demands of the market. According to Steele, Japan’s supply constraints stem not only from growing restraints on power as is largely the case in the US and much of Europe, but also a critical shortage of land and pressure on local supply chains.
This is especially true for data centres for cloud services and storage, as proximity to end users is the most effective way to reduce latency. In densely populated Tokyo where the three new campuses will be located, the competition is fierce for any piece of real estate, let alone for an industrial site capable of hosting a data centre of up to 100MW.
“It takes time, knowledge and relationships in the local market to be able to find, locate and acquire land in the right places,” Steele said. “The reason we have been successful in acquiring and progressing these projects is that we’ve had a very large and leading industrial real estate business in Japan for well over a decade.”
“Combining this deep local real estate presence with our vertically-integrated global data center platform, we’re continuously sourcing land acquisitions and strengthening our relationships in the Japan market.”
Steele indicated that the three campuses under development will be able to adapt to changing developments in what services are demanded by the market as well.
“We focus on delivering capacity in high-demand, fungible locations with flexible data center designs that can be customized for different workload characteristics. This enables us to support a wide range of high- and low-density customer requirements, including AI, cloud and traditional applications, without the need for complicated and expensive retrofits,” Steele said.
“We think this approach positions our portfolio to be more durable as technology continues to evolve.”
AloJapan.com