Edo's data center development project in Incheon has gained momentum after securing KT Cloud, Korea's largest cloud company, as its key tenant.
According to investment banking (IB) industry sources Thursday, KT Cloud submitted a letter of intent (LOI) expressing its wish to occupy the 50-megawatt (MW) mid-to-large data center Edo is developing in the Seo-gu area of Incheon.
KT Cloud plans to use the Incheon center as a core artificial intelligence (AI) hub for the greater Seoul area. The move is seen as a preemptive effort to secure infrastructure in response to recently surging demand for cloud and AI data computing. For KT Cloud, which must pursue trillion-won-scale capital raising in the market going forward, securing this key infrastructure is expected to have a positive impact on enhancing its corporate value.
With KT Cloud's participation demonstrating the project's financial stability, fundraising is also picking up speed. Shinhan Securities is currently serving as the lead arranger for project financing (PF) of 550 billion won in total, including construction costs. This work has recently entered its final stage, sources said.
Edo's investment recovery structure is also already taking concrete shape. With a stable tenant secured, Ehwa Asset Management has agreed to acquire an 80 percent stake in the data center asset upon groundbreaking and is in final-stage negotiations. As a result, Edo, which drew up the development blueprint from the early stages of the project, will be able to minimize development risk and realize stable returns.
As the project gains full traction, analysts say Edo has solidified its position in the high-value data center development market, moving beyond its existing role as an eco-friendly operations and maintenance (O&M) specialist. "In a situation where demand for AI data centers is surging, preemptively securing a large cloud company as a tenant is a key factor that determines the success or failure of a project," an IB industry official said. "This deal will become a representative example of greater Seoul data center development where the developer, tenant, and investor all win."
