ESR Group's CAF II Invests in Racks Central, Supporting Johor AI Campus Development

SINGAPORE — ESR Group Group, an Asia-Pacific focused real asset owner and manager, announced on June 15, 2026, that the China-ASEAN Investment Cooperation Fund II (CAF II), for which ESR acts as sub-investment advisor, has made a strategic investment into Racks Central, a Singapore-headquartered data centre platform. The investment is intended to advance next-generation, energy-efficient data centres across the Singapore–Johor–Batam corridor to meet growing AI and hyperscale demand.

Investment Supports Racks Central's Regional Expansion

The investment will support Racks Central's overseas expansion, beginning with Johor, Malaysia, building on the company's established colocation operations in Singapore. According to ESR Group, the capital commitment is intended to strengthen Racks Central's ability to deliver large-scale, AI-ready and energy-efficient data centre capacity to hyperscalers, cloud service providers, and enterprises across Southeast Asia.

CAF II is a US$1 billion fund. ESR Group serves as sub-investment advisor to the fund. ESR Group has stated it maintains a data centre development pipeline of over 3 GW across the Asia-Pacific region.

Jeffrey Shen, Co-founder and Co-CEO of ESR, commented on the investment: "The rapid acceleration of AI adoption and digital transformation is fundamentally reshaping data centre requirements across Asia-Pacific. As sub-advisor to CAF II, and with ESR's data centre development expertise across a pipeline of over 3 GW, we are pleased to support Racks Central's transformation to a scalable, regional data centre platform for hyperscale and enterprise customers."

Racks Central Johor AI Campus

The Racks Central Johor AI Campus is located in Pasir Gudang, Malaysia. The campus is planned to comprise four large-scale developments with a combined capacity of up to 510 MW. The first phase, designated RCJM 1 and carrying a capacity of 90 MW, is targeted to be ready for service by Q1 2027, according to ESR Group's announcement.

Bobby Wee, Founder and CEO of Racks Central, said: "We are pleased to welcome ESR and CAF II as strategic partners. Their capital commitment and infrastructure expertise will support our ambition to develop a seamless, AI-ready data centre corridor across Southeast Asia, enabling our customers to scale efficiently as regional digital demand continues to grow."

Southeast Asia Data Centre Demand

Southeast Asia is experiencing sustained growth in AI adoption, cloud computing, and digital innovation, driving demand for scalable, high-performance data centre infrastructure, according to the e-Conomy SEA 2025 report by Google, Temasek Holdings, and Bain Capital, cited in ESR Group's announcement.

Founded in 2014, Racks Central currently operates a 12 MW colocation data centre in Singapore, serving enterprise and cloud customers. The Johor campus represents an expansion of the company's regional footprint as part of its strategy to develop an AI-ready data centre corridor across key data centre hubs in Southeast Asia.

Sustainability considerations are embedded across Racks Central's developments, the company stated, including energy-efficient design, advanced cooling solutions, and responsible resource management.

No financial terms beyond the US$1 billion fund size of CAF II were disclosed in connection with the specific investment into Racks Central.

Sources

ESR Group — CAF II Invests in Racks Central to Advance Southeast Asia Data Centre Corridor (June 15, 2026)