Ritz Association and Data Center Federation Join Hands to Boost New Data Center Investments

The Korea REITs Association and the Korea Data Center Federation announced on the 22nd that they have signed a business agreement to promote information exchange and institutional improvements in the real estate finance sector related to data centers.

Jung Byung-yoon, Chairman of the Korea REITs Association (left), and Kang Jung-hyup, Chairman of the Korea Data Center Federation, are posing for a commemorative photo after signing a business agreement on the 22nd to exchange information and promote institutional improvements in the real estate finance sector related to data centers. / Photo by Korea REITs Association

Through this agreement, the two organizations will collaborate on ▲ conducting exchange and cooperative research for the development of the data center industry and REITs ▲ providing advisory cooperation related to the promotion of data center construction through REITs ▲ exchanging necessary information to revitalize data centers ▲ promoting improvements in regulations and systems related to data centers. They will also propose financial and tax support to relevant government departments to encourage active new investments in data centers using REITs.

Real Estate Investment Trusts (REITs) are investment products that provide the general public with opportunities to invest in high-quality real estate with small amounts of capital. Recently, the scope of investment has expanded to include data centers. Currently, there are three REITs in Korea holding data centers as assets, with total assets amounting to approximately 544.4 billion KRW.

However, compared to the scale of data center REITs in the United States (approximately 1,517.7 trillion KRW) and Singapore (approximately 4.2 trillion KRW), these represent only 0.3% and 13%, respectively. The domestic data center market is also relatively small, valued at about 5 trillion KRW as of 2021, compared to the global data center market of 85.7 trillion KRW.

Both organizations expect that this agreement will enable the public to enjoy profits from data center REITs and accelerate the establishment of high-quality data centers in Korea, thereby strengthening the country's future competitiveness.