Equinix, PGIM form $770m data centre partnership

Next DC’s proposed 150 megawatt West Footscray data centre.

Equinix will develop two xScale data centres at Rosehill after striking a $770 million partnership with PGIM Real Estate – the property investment arm of Prudential Financial.

The deal will see the technology group control 20 Australian International Business Exchange (IBX) assets – 17 are completed with another, in Perth, set to open later this year.

PGIM will hold an 80 per cent stake in the new Sydney centres – SY9x (artist’s impression, top), which is under construction, and SY10x – expected to be operational in 2025.

Both will have more than 55 megawatt capacity, targeted to hyperscale companies and cloud providers such as Amazon Web Services, Google Cloud, IBM Cloud, Microsoft Azure and Oracle Cloud.

Equinix will develop and market them.

xScale data centres are operating in London, Paris, Tokyo and Sao Paulo.

Building boom

The partnership agreement comes two months since rival data centre provider NextDC acquired a West Footscray block – next to another it bought last year – with plans for a 150MW centre.

In July, that group paid CSR $124m for a 12.4ha parcel at Horsley Park, with plans for a 300MW asset.

Six months ago, Microsoft outlaid $18.92m for a 2.57ha parcel for an investment of this type at Seven Hills, about 10 kilometres west of Rosehill.

Last year Centuria spent $416.7m on a Clayton data centre complex offered with a leaseback by Telstra (story continues below).

PGIM enters data centre sector

PGIM chief executive officer Eric Adler said the partnership “is a highly symbolic venture between two market-leading firms with complementary business models and global capabilities”.

Equinix president and CEO Charles Meyers added that hybrid multicloud product is becoming the IT architecture of choice for leading businesses.

“These companies recognise that digital infrastructure is a source of competitive advantage, and they are leveraging Platform Equinix to directly connect and operate close to the largest cloud companies powering this infrastructure,” according to the executive.

“Our new relationship…follows our successful partnership with GIC and will enable the world’s largest hyper-scalers to expand within the Equinix ecosystem in Australia”.

PGIM has been reweighting its local property portfolio.

In May, the investor partnered with Manulife, spending $850m for a 90 per cent stake of 20 industrial assets – the so called Fife portfolio – offloaded by Blackstone.

Also in the second quarter, the Prudential Financial arm picked up two Brisbane offices – 307 Queen St, with Fortius, for $142.15m and 444 Queen St ($54.5m).

Last month the group sold a bulky goods retail investment, Craigieburn Junction, in Melbourne, for $135m to QIC.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.