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Keppel’s Profit Boosted by Strong Data Centre Demand

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Singapore’s Keppel Corporation reported a 5% rise in its full-year underlying profit, driven by robust performance in its connectivity segment, particularly in the data centre business. The company’s data centre operations saw an impressive 45% increase in annual net profit, reflecting the surging demand for digital infrastructure needed to support artificial intelligence services.

Keppel’s connectivity arm, which operates data centres that house servers and other computing equipment, has benefitted from the growing need for AI-driven digital infrastructure, particularly in the Asia Pacific region. As AI and other digital services expand, investments in data centres are expected to grow, further bolstering the company’s performance.

The firm, originally established over 56 years ago as a shipbuilding yard, has plans to more than double its data centre funds under management and increase its capacity, as announced in October. However, the highest-earning segment of Keppel’s infrastructure business saw a slight 4% decline in profit to S$673 million, largely due to lower fair value gains and reduced distributions from Keppel Infrastructure Trust.

Keppel’s net profit from continuing operations, excluding its offshore and marine assets, rose to S$1.06 billion ($784.20 million) in 2024, up from S$1.02 billion the previous year. The company, transitioning into an asset management firm, has set a target to manage S$200 billion in assets by 2030. As of December, its funds under management reached S$88 billion.

The company declared a final dividend of 19 Singapore cents per share, consistent with last year’s payout.

 

Italy’s Data Centre Investments Set to Surge to €10 Billion by 2025-26

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Italy’s data centre investments are projected to reach €10 billion ($10.3 billion) in the 2025-2026 period, marking a substantial increase from the previous two years. This growth is driven by major technology firms eager to expand their cloud infrastructure to meet rising demand, particularly fueled by artificial intelligence (AI). According to a report from Milan Polytechnic University’s research hub, these investments will play a crucial role in boosting Italy’s technological capabilities.

However, the country faces challenges in accommodating this surge in investment. The report highlights potential bottlenecks in the power grid and the high cost of energy, which could impede the expansion of data centres. As large cloud developers, such as Microsoft and Amazon Web Services (AWS), ramp up their spending plans, access to affordable and reliable energy is becoming increasingly critical.

For context, Microsoft announced a €4.3 billion investment in Italy’s cloud network last year, while AWS committed to a €1.2 billion investment over five years. Despite these positive developments, concerns persist about the sustainability of the Italian electricity grid and its ability to support the growing demand for energy-intensive data centres. Marina Natalucci, director of the research hub, emphasized the need to address these energy supply challenges as Italy attracts more investments from global tech giants.

 

Goodman Group Surges Amid Australian Data-Centre Expansion

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Goodman Group’s stock has soared this year, outshining its Australian property peers thanks to its strategic push into the data-centre sector. The rising demand for artificial intelligence services has driven major cloud service providers, including Amazon, Microsoft, and Meta, to invest heavily in data centres. This trend has sparked a surge in Australia’s nascent data-centre market, with companies like Blackstone and NEXTDC also making significant investments.

Goodman Group, Australia’s largest property developer, counts leading global hyperscalers as customers. While the company has not disclosed the identities of these clients, its portfolio clearly reflects the growing need for data centres, with 42% of its A$12.8 billion portfolio under construction dedicated to these specialized facilities. This expansion has helped boost Goodman’s stock by 45.8% this year, positioning it for its best performance since 2006.

Despite the strong growth, some market analysts caution that the high valuations of data-centre-focused stocks might signal a cooling investor sentiment. Concerns include the potential for obsolescence in data-centre infrastructure and increased competition in the market. However, Goodman’s robust pipeline, access to land with power supply, and ongoing investment into the sector continue to fuel optimism about its future prospects.