With new supply constrained, execution capabilities gain importance as IGIS Asset Management builds on its development experience in Hanam and Samsong.
Investor expectations for growth in South Korea’s data center market are rising, but translating that potential into investment returns remains a challenge. Power constraints and permitting hurdles are limiting new supply, while projects that break ground must still progress through construction to stable operations. Alongside an understanding of demand, asset managers’ experience in managing risks across development and operations is becoming increasingly important.
Why Korea’s data center market is attracting attention
Demand for digital infrastructure from domestic and international businesses is underpinning growth expectations for Korea’s data center market. Global cloud service providers are expanding their presence in the country, while the proliferation of data-intensive services, including artificial intelligence, autonomous driving and the Internet of Things, is driving demand for data processing, storage and computing capacity. Data centers are evolving from facilities that support digital services into essential infrastructure for AI adoption across industries.
Investors’ expectations for asset price appreciation reflect this outlook. According to CBRE Korea’s 2026 Korea Investor Intentions Survey, 88% of Korean respondents expected data center asset prices to rise, the highest proportion among the asset classes surveyed. Rents have also increased. Average data center colocation rents in the Seoul metropolitan area rose by more than 70%, from approximately KRW 140,000 per kW in 2019 to around KRW 250,000 in 2025.
Expanding supply to meet this demand, however, remains difficult. Securing access to the power grid is a major hurdle for new developments, particularly in the Seoul metropolitan area. According to data from the Ministry of Climate, Energy and Environment, only 10 of 522 data center technical review applications submitted under the metropolitan area’s power grid impact assessment process between August 2024 and March 2026 received final approval for power supply, a rate of just 1.9%. With data center vacancy in the region remaining below 5%, difficulties in securing power continue to constrain new supply.
This gap between demand and supply could create investment opportunities for data centers with the necessary foundations for development. Yet power supply approval is only one step. Building permits, design and construction, cost and schedule management, and tenant acquisition all remain critical. Turning Korea’s growth potential into investment returns requires both an understanding of demand and the experience to manage development risks and operate assets reliably.
IGIS Asset Management’s data center track record in Korea
Against this backdrop, IGIS Asset Management is expanding its digital infrastructure investment platform, drawing on its experience as the only Korean asset manager to have completed the full data center investment lifecycle, from development and operations through to exit. It is also the only Korean asset manager with a track record of completing at least two hyperscale data centers.
The Hanam data center illustrates this end-to-end experience. IGIS oversaw land acquisition, permitting, development and operations before selling the asset to Macquarie Korea Infrastructure Fund in 2024. The project demonstrated the firm’s ability to carry an investment beyond construction into operations and an eventual exit.
Experience gained in Hanam is informing subsequent projects. In March 2025, IGIS broke ground on a 40 MW hyperscale data center in Choji-dong, Ansan, Gyeonggi Province. The project, being developed on a site of approximately 11,796 square meters, is targeting completion in the second half of 2027. In July 2026, the firm completed a hyperscale data center in Samsong, Goyang, with an incoming power capacity of 80 MW.
IGIS aims to build a data center portfolio totaling 520 MW and KRW 13 trillion in assets under management by 2031.
From individual data centers to digital infrastructure
IGIS views data centers as digital infrastructure supporting business operations and society’s digital activities. Large hubs handling intensive computing workloads, edge facilities serving applications that require rapid response times, and backup facilities supporting disaster recovery each have different location and technical requirements. A company’s infrastructure needs cannot always be met by a single facility. To address this, IGIS is pursuing its “Sphere” concept, connecting data centers with complementary functions into a network that can respond to customers’ needs in a coordinated way.
This approach also informs its location strategy. Latency-sensitive applications require facilities close to end users, whereas AI training and backup facilities can be located farther away. IGIS expects data center locations to become increasingly differentiated by function, extending beyond the current concentration in the Seoul metropolitan area. The firm is also pursuing projects in southeastern Korea, where power availability and connectivity through international subsea cable landing hubs support development.
The target market must be defined at the planning stage. Performance requirements and designs vary substantially by use case, and changes during development can add significant costs. As a manager of third-party capital, IGIS seeks to identify its intended customers and their requirements from the outset, competing on a clearly defined and differentiated offering rather than primarily on pricing or returns.
Development uncertainty presents another challenge. Projects typically take three to five years from planning to completion, and reliance on imported critical equipment leaves schedules exposed to supply chain bottlenecks. Lead times for some equipment that could initially be procured in around 10 months have subsequently stretched to as long as two years. Meanwhile, AI-related technical requirements continue to evolve. Asset managers must keep pace with technological and industry developments, align the interests of investors, lenders, contractors and operators, and incorporate these changes into project delivery. Drawing on its development and asset management experience in offices, logistics and other sectors, IGIS sees the future of digital infrastructure in combining established real estate expertise with digital capabilities across asset classes.
“Data centers are a core driver of AI and the digital economy, as well as essential infrastructure,” said Hong Chang-ui, head of the Business Part within IGIS Asset Management’s Digital Business Group. “Building on our experience in taking Hanam through development, operations and sale, together with the completion of Samsong, we will strengthen execution across our subsequent projects and build a data center portfolio that meets the needs of global institutional investors.”
For more information, visit IGIS Asset Management’s website and LinkedIn page.
Original article: mingtiandi.com
English brief by Korea Wind Intelligence, koreawindintel.com
