The Deal
KKR is leading a consortium in advanced discussions to acquire a majority stake in ST Telemedia Global Data Centres (STT GDC), according to reports from the Wall Street Journal. The transaction values the Singapore-based operator at more than S$13 billion (US$10 billion including debt). Singtel, GIC, and Mubadala would participate as minority investors.
Singtel confirmed discussions are underway but cautioned "nothing is definite." The other parties declined to comment. If closed, this would rank among Asia's largest data center transactions.
What's Being Bought
STT GDC operates more than 100 data centers across 20 markets with over 2GW of IT load capacity. The portfolio spans Singapore, India, Japan, and Europe (including Germany, UK, and Italy through VIRTUS). Founded in 2014, the company is currently majority-owned by Temasek (via ST Telemedia, approximately 82%), with KKR holding roughly 14% following a US$1.3 billion investment in 2025.
The scale matters: 2GW is substantial capacity in markets where power availability increasingly constrains expansion. Singapore, for example, has imposed data center moratoriums due to power grid limitations.
The AI Factor
The valuation—up from earlier November 2025 reports suggesting S$5 billion for an 80% stake—reflects the surge in AI-driven infrastructure demand. Hyperscalers are racing to secure capacity across Southeast Asia for training and inference workloads. Low-latency requirements for financial services in Singapore and India add premium value to strategically located facilities.
Data center cap rates in APAC have compressed as institutional capital chases AI infrastructure exposure. The IRR calculations here likely factor in aggressive assumptions about AI workload growth and power cost arbitrage between markets.
What to Watch
This is the third attempt at platform consolidation for this group of assets. Previous efforts taught the parties something about structuring and pricing. The real test comes in integrating operations and delivering returns that justify the valuation.
Temasek's willingness to dilute suggests confidence that this management team and capital structure can execute. Or it suggests they're taking liquidity while the market's hot. History will tell us which.