Data Center Bytes

As experienced investors in Japanese real estate know, the Tokutei Mokuteki Kaisha (TMK) is the Japanese entity used by most investors to acquire and hold large real estate assets due to its favorable tax treatment. It is also well known that the TMK is a highly regulated entity, and the laws and regulations governing the TMK are rife with traps for the unwary. For investors in Japanese data centers who use the TMK as their investment vehicle, a couple of these traps arise because of the high value of the TMK’s movable assets (i.e., the data center fit out) in relation to its immovable assets (i.e., the land and the core and shell of the data center).

We are closely following the recent announcement by France and the UAE regarding their €30 billion–€50 billion investment to build Europe’s largest AI data center in France with up to 1 gigawatt of capacity. The announcement underscores a broader AI agreement between the two nations, aiming to boost the AI infrastructure and technology of both. This project aligns with broader European efforts to strengthen AI capabilities and compete globally, supported by substantial private and public investments.