Data centre giant AirTrunk bets big on Singapore, mulling Reit IPO

[SINGAPORE] Australian data centre player AirTrunk is betting big on Singapore. Its billionaire founder and chief executive Robin Khuda said that the company has invested roughly S$3 billion to date and that if there is an opportunity, “we have the appetite to go significantly bigger”.“Singapore is a priority for us,” said Khuda in an exclusive interview with The Business Times. The company – one of Asia-Pacific’s largest data centre platforms – views Singapore as a key financing hub, as it mulls a real estate investment trust (Reit) listing, among other capital-raising options.AirTrunk on Friday (Mar 13) launched its new regional headquarters at Ocean Financial Centre, marking its 10th year in Singapore, where it has three data centres – two of which are under development – with a total capacity of 180 megawatts. The Republic also serves as AirTrunk’s Asia headquarters, housing functions such as engineering, development, operations, innovation and treasury. Khuda plans to hire more across all divisions, and aims to treble its 115-strong workforce in Singapore to nearly 350 by 2030 with the addition of “high value” jobs.With its rapid expansion, AirTrunk is tapping the city-state as a base to raise fresh funds. In August last year, it secured a nearly S$2.3 billion green loan to finance its second Singapore data centre.A Reit initial property offering is now on the cards. Said Khuda: “The Singapore Exchange (SGX) is one of the very attractive Reit markets across Asia. There are already a couple of pure data centre Reits (that are) very successful.”SGX-listed players include Keppel DC Reit, sponsored by asset manager Keppel, and Digital Core Reit, whose sponsor is data centre giant Digital Realty.Asked for more details on a Singapore Reit listing and how much AirTrunk could raise, the CEO would only say that the company is still “exploring different options” for fresh capital such as asset-backed securities and selling equity stakes in certain data centres, and that “all we know is we’re going to need a lot of capital”.He noted that financing in Asia-Pacific has been focused on the traditional debt market, but that looking into alternative instruments is a “natural evolution” for the company.Data centres tick a lot of the boxes that bondholders or investors in asset-backed securities look for: long-term contracts and very credit-worthy customers, added Khuda, noting that it opens up “a massive pool of capital”.Another financing option for AirTrunk is selling equity stakes in its “stabilised” data centres which have achieved a certain level of occupancy or consistent cash flow.Stabilised assets could be attractive to investors such as pension funds, which are more cautious about the risk of developing new assets. As a whole, data centres are “the best asset class any investor can have”, said Khuda, noting how they sit at the intersection of real estate, infrastructure and technology.Founded in 2015, AirTrunk was an early entrant in hyperscale data centres, often designed for tech giants such as Amazon and Meta. Besides Singapore, the company also has data centres in Johor, Hong Kong, Japan and Australia. It has grown its headcount aggressively, adding 200 staff globally in the last 12 months.The company was acquired in a blockbuster A$24 billion (S$21.7 billion) deal in 2024, by a consortium led by private equity giant Blackstone and the Canada Pension Plan Investment Board.Global expansion and AI outlookThe fresh funding will fuel AirTrunk’s ambitious growth plans, including a planned entry into India “within this calendar year”. Khuda cited the country’s big artificial intelligence (AI) ambitions and “huge supply” of renewable energy.AirTrunk also plans to build data centres in Saudi Arabia, in partnership with AI company Humain. Asked if the ongoing conflict in the Middle East has affected AirTrunk’s expansion plans, a spokesperson said: “Our view on the Middle East as a priority growth market remains, and our investment and development plans will continue.”Addressing market fears of an AI bubble, Khuda conceded: “Short term, there will be volatility, no question.”He drew a comparison to the Railway Mania of the 19th century, when investors piled into shares of railway companies, giving rise to a bubble that eventually burst. But while many lost money, railroads still transformed economies. In the same vein, data centres are “the invisible engine room of the AI economy”.“I think there is some level of unrealistic expectation of adoption of AI in a very short period of time,” he said. “But when I look at the long term… I think we are significantly underinvested.”