At the very core of Tokyo Century’s business lies our ability to discern the true value of assets—a capability we call our discerning eye. In this feature, we explore how this specialized insight is applied across the various products we offer. For our seventh installment, we spotlight the data center sector, where global demand is surging due to the rapid growth of generative AI and digital transformation. We spoke with Nagaki Abe from the Global Business Unit to get a behind-the-scenes look at our data center projects and Tokyo Century’s unique strengths.
Supporting the Foundations of a Digital Society Alongside Global Partners
—To start, could you give us an overview of the data center business and explain Tokyo Century’s role?
Abe: We develop and operate data centers through strategic collaborations with powerful partners, such as the NTT Group and the Mitsubishi Estate Group.
Data centers are specialized facilities designed to safely house and operate the internet servers and networking equipment that process massive amounts of data. They serve as the essential digital heart of modern corporations and society. Because active servers generate an immense amount of heat, efficient cooling systems are indispensable, making it critical to build an environment that ensures a stable and high-volume power supply.
In the joint business with the NTT Group that I am responsible for, we have executed two large-scale data center projects in India and one in the United States. Tokyo Century plays a key financial role, structuring optimal financing schemes to fund the data centers developed by the NTT Group.
Our commitment, however, goes far beyond simply providing capital. We are deeply involved throughout the project lifecycle—from monitoring construction progress during the development phase to ensure everything stays on schedule, through to tracking performance post-completion to guarantee that the data centers operate safely and smoothly.
Exterior of a data center in Mumbai, India (Mumbai 8)
Driven by Social Contribution: Backing the Explosive Rise of Generative AI
—How does the data center business contribute to society?
Abe: Simply put, we are supporting the advancement of a digital society. Today, many enterprises and municipalities are actively pursuing digital transformation. A shortage of data centers could bottleneck these initiatives and delay the broader adoption of IT.
In recent years in particular, the global demand for cloud services and generative AI has skyrocketed. To foster their adoption, we need large-scale data centers equipped with efficient cooling systems and a stable, 24/7 power supply that never fails.
Notably, AI-specific servers consume electricity and generate heat at an entirely different order of magnitude compared to standard servers. Developing and supporting cutting-edge data centers capable of handling these demanding conditions will serve as the backbone for progress in this evolving AI era. As this infrastructure matures, it will boost corporate operational efficiency and help address critical labor shortages.
The Discerning Eye for Assessing Profitability and Risk Across Borders
—How does Tokyo Century’s signature discerning eye come into play in the data center business?
Abe: It is most critical during the investment decision-making phase, where we evaluate whether or not to provide financing for these massive capital deployments.
First and foremost, we look at profitability. We strictly evaluate whether an investment will yield sufficient returns over the medium to long term. To judge this accurately, we need not only deep expertise in data centers themselves, but also a profound understanding of the specific country or region where the facility will be located. Laws, tax systems, and infrastructure environments vary drastically from country to country. Recently, we have also incorporated rising construction costs driven by global inflation as a key risk factor within our profitability models.
Secondly, securing a reliable power supply is paramount to data center operations. When developing a new facility, we carefully verify whether sufficient and stable power can be sourced before making any investment decisions. For instance, in our U.S. project, we ensured a stable power supply by developing an on-site, company-owned substation.
Furthermore, efficiency alone is no longer enough. Aligning with local communities and prioritizing environmental sustainability have become essential criteria in recent years. Discerning whether a project will be embraced as a truly sustainable infrastructure asset that grows alongside the region is another crucial element of the discerning eye we bring to the table.
"Our discerning eye lies in comprehensively evaluating both macro and micro environments on the ground to precisely gauge risks and value," says Abe.
—What other professional skills have you developed through this business?
Abe: I feel I have truly sharpened my international project management capabilities. Because our partner, the NTT Group, is a global enterprise, we work in close coordination with team members from various countries, including the U.S. and India. While navigating differences in culture and business practices can lead to tough negotiations, overcoming these challenges always provides fresh perspectives and invaluable learning experiences.
Collaborative work with global members via an online meeting
The Unforgettable Moment of Seeing the Completed Asset On-Site After Overcoming the Pandemic
—I understand you have been involved in this business since its inception.
Abe: Yes. Right after I joined the company as a fresh graduate, the launch of this data center business was approved internally, and I have been consistently involved as one of the founding members. At the time, we had limited internal expertise regarding data centers, so there was a period of trial and error. By persevering through these challenges, our team successfully built up a wealth of experience and expertise.
—What has been the most rewarding moment for you so far?
Abe: Without a doubt, nothing compares to the emotion of seeing a completed data center in person. For our first project in India, the COVID-19 pandemic prevented us from traveling, meaning the project progressed entirely through online meetings for a long time. When travel restrictions were finally lifted and I saw the actual facility with my own eyes, I remember being deeply moved beyond words.
"Sharing that moment of joy on-site with the team members I had only ever debated with through a screen made all the hard work completely worth it. It was incredibly rewarding," says Abe.
Further Expanding into New Regions to Power Global Digitalization
—Lastly, what is the outlook for the data center business?
Abe: Centered on co-creation with the NTT Group—a world-class operator—we will accelerate our investments by selecting high-quality projects. At the same time, we will pursue an asset recycling business model by dynamically shifting our asset portfolio, balancing robust risk management with high capital efficiency. Within the value chain surrounding data centers—critical infrastructure supporting our digital society—we aim to create new businesses and ecosystems by combining the diverse services of the Tokyo Century Group, ultimately contributing to the resolution of global social issues.
Nagaki Abe
Global Partnership Strategy Management Division, Global Business
Abe joined Tokyo Century as a new graduate in 2020. Having spent his childhood in the United States, he entered the company with a strong desire to build a career in global business. He was assigned to the International Business Unit in his first year and has been consistently involved in the launch and expansion of the data center business ever since.
