A Global Data Centre Provider

Project Overview

The project involves the development of a hyperscale data centre campus in Tokyo Japan. This is the progressive development of data centres with a total of seven independent data centres with a capacity of more than 300MW. Phase 1 development consists of the construction and fit-out of two buildings (data centres B and C).
This project is one of the largest developments in the APAC region (excluding China), located in the lnzai-Tokyo data centre hub. The global data centre provider secured a long-term lease agreement with an anchor tenant, which enabled the commencement of the project. In 2020, the global data centre provider engaged a construction contractor and a facilities contractor to oversee all aspects of the development including the design, procurement, statutory approvals, equipment installation, construction and fit-out works. Initiating the construction of this data centre was made even more challenging given the emergence of COVID-19 at the same time.

TBH’s Role

The Lenders who were considering financing the project were unfamiliar with the method of constructing a new data centre in Japan. The Lenders appreciated TBH’s independent advice to identify and potentially mitigate the risks associated with the project and to also validate the time and cost estimates proposed to determine if there were any critical concerns about the project. The Lenders had previously engaged TBH to provide unbiased advice on their data centre developments in Australia, Hong Kong and Singapore and sought its independent advice on this project. TBH worked closely with the global data centre provider to provide an independent preliminary assessment (Letter of Opinion). Having confirmed there were no “showstopper” risks, TBH developed a detailed Lenders Technical Advisory (LTA) report to provide the Lenders with a clear understanding of the risks involved. Given the logistics challenges of COVID-19, TBH partnered with a local firm to complete this engagement. This arrangement enabled the report to be completed on time and enabled the benefit of the Japanese partners’ local knowledge.

TBH developed the independent assessment report on the proposed project, the review conducted covers the following key elements:

• Site parameters and conditions
• Experience and capabilities of the key project participants
• Proposed project budget, including benchmarking
• Proposed construction programme
• Contract documentation

The TBH Difference 

TBH carried out these reports by reviewing the project documentation, including the preliminary programmes, cost plans, construction methodology and statutory approval register to identify any potential risks and strategies to mitigate risk, at the early stage of the project. TBH also conducted multiple site visits to gain high level understanding of the site conditions and current progress. TBH applied its depth of experience in acting as the LTA to provide clear, concise reports and advice to facilitate the onboarding of debt providers. In addition, TBH provided this data centre provider with progressive feedback on key risks and issues, accompanied with recommendations to address them, to ensure the successful delivery of the project. TBH also provided ongoing independent certification services on behalf of the Lenders to monitor debt drawdown against site progress.

To find out more about TBH’s Strategic Advisory Services experience, please visit the Strategic Advisory Services page.