Koramco to Develop Massive IDC in Busan Following Seoul and Ansan

Koramco to Build Massive Data Center in Busan
Aiming to Establish a Nationwide Digital Infrastructure Hub with Busan as a Key Growth Investment Location

Koramco Asset Management announced on August 29 that it will begin developing the 'Koramco Busan Jangnim Data Center,' a massive data center located in Jangnim-dong, Saha-gu, Busan. Koramco has completed the establishment of a project finance investment company (PFV). Construction is scheduled to begin around the middle of next year, once detailed design changes are finalized.

The Koramco Jangnim IDC will be built on a site with a total area of 10,358 square meters (approximately 3,133 pyeong), consisting of four basement floors and seven above-ground floors, with a total floor area of 46,877 square meters (about 14,180 pyeong). A contract for a 40MW power supply capacity has also been signed with Korea Electric Power Corporation. The total project cost is approximately 580 billion won, with Koramco, LF, and GS Engineering & Construction participating as PFV shareholders.

Koramco Asset Management will serve as the asset management company (AMC), overseeing the entire project, while Koramco Asset Trust will participate as the fund manager. GS Engineering & Construction and LG Uplus will be responsible for construction and facility operation. The entire process of development, operation, and asset management will involve LG Group affiliates, creating expected synergies among the group companies.

Busan, where the data center will be located, is a region through which more than 90% of domestic submarine optical cables pass and has a power self-sufficiency rate of 217%. It is highly favored by global cloud service providers (CSPs) and has stable demand. As the difficulty of developing IDCs in the Seoul metropolitan area has increased significantly, Busan is now considered a key hub capable of capturing the demand for relocating data centers to regional areas.

Data centers have become an attractive investment target both domestically and globally, driven by the surge in demand for cloud and AI. In Seoul and the surrounding metropolitan area, new supply has been sharply restricted due to power supply limitations and local opposition. Busan, as the largest telecommunications hub in Korea where submarine optical cables and landing stations are concentrated, boasts direct network connections to major Asian countries such as Japan and China, giving it a significant geographical advantage. This is why Busan is rapidly emerging as an alternative location for data centers.

Koramco recently announced its vision to expand investments in digital infrastructure, including data centers, to approximately 10 trillion won by 2028. Through this, the company aims to respond to the demand from new industries such as AI, cloud, and big data, and to become the largest digital infrastructure investment platform in Korea.

In June, Koramco completed the Case Square Data Center Gasan, and earlier this month, signed a facility operation agreement with DCI, a subsidiary of global alternative investment manager Brookfield, for the development of the Ansan Seonggok IDC. The company is accelerating its investments in data centers. Its strategy is to establish nationwide digital infrastructure hubs, with the Seoul metropolitan area and Busan as the two main axes.

Unlike other asset managers that purchase and operate data centers developed by others, Koramco differentiates itself by leading the development directly. Koramco has a dedicated development division composed mainly of employees with construction backgrounds. The company has internalized the capabilities to take charge of the entire process, from initial land acquisition to financing, design and permits, and construction.

Led by the development division, Koramco plans to accelerate data center investments through the future launch of blind funds and listed REITs under its Data Center Division. Through these efforts, the company aims to secure a leading position in the data center industry.

Park Hyungseok, CEO of Koramco Asset Management, stated, "Data centers are a core infrastructure driving the Fourth Industrial Revolution, including AI, cloud, and big data, and are attracting increasing attention from global investors." He added, "As Koramco and LG Group affiliates have established a stable investment structure and the most efficient operating system through strategic cooperation, we will achieve differentiated results."