SC Capital Partners, a real estate investment manager based in Singapore, is reportedly considering a bid for UK data center operator Global Switch. The firm is supported by CapitaLand Investment and is working with advisers on the potential acquisition.

Global Switch is currently owned by Chinese firm Jiangsu Shagang Group.

The deal could be valued between US$4 billion and US$5 billion, though no agreement has been finalized.

Global Switch has attracted investor interest due to growing demand for digital infrastructure, driven by AI and cloud computing. In 2022, its shareholders considered a sale, but earlier talks with EQT fell through.

The company’s Australian operations were sold to HMC Capital in 2024 for A$1.94 billion (US$1.21 billion), following data security concerns and a government ban.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Global switch’s declining valuation reflects geopolitical and security concerns in data center ownership

Global Switch’s potential sale at $4-5 billion represents a significant drop from the $8 billion valuation during previous talks with Swedish private equity group EQT in 2023, despite growing demand for data center capacity.

This valuation decline can be partially attributed to security concerns about Chinese ownership, exemplified by the Australian government’s 2020 ban on government agencies using Global Switch Australia due to data security issues after Jiangsu Shagang Group acquired its controlling stake.

Global Switch has already divested its Australian business to HMC Capital for A$1.94 billion earlier this year, further reducing its footprint and potential valuation.

The company’s changing ownership trajectory—from the Reuben brothers to Chinese steel giant Shagang Group in 2016 for £2.4 billion, and now potentially to Singapore-based SC Capital—highlights how data center ownership has become increasingly scrutinized for national security implications 1.

This trend reflects broader concerns about critical digital infrastructure control, similar to patterns seen in telecommunications and other sensitive technology sectors where ownership often faces regulatory and security reviews.

2️⃣ AI-driven demand reshaping data center market fundamentals and investment patterns

Global interest in digital infrastructure assets like data centers remains strong despite macroeconomic uncertainties, primarily driven by the explosive growth of AI and cloud computing services.

Industry forecasts predict data center electricity usage could nearly double from 536 TWh in 2025 to 1,065 TWh by 2030, reflecting the sector’s dramatic expansion trajectory 2.