Equinix, PGIM Real Estate to develop xScale data centres in Aus
Digital infrastructure company Equinix, Inc. has established a US$575 million joint venture in the form of a limited liability partnership with PGIM Real Estate, the real estate investment and financing arm of Prudential Financial’s global asset management business. The partnership will see both companies develop and operate two xScale data centres in Sydney, Australia. The facilities in the joint venture, which will be known as SY9x and SY10x, are expected to provide more than 55 megawatts (MW) of power capacity to serve the unique core workload deployment needs of a targeted group of hyperscale companies. The SY9x data centre in Sydney is expected to open in Q1 2022.
Combined with Equinix’s existing hyperscale joint ventures in Europe, Asia–Pacific and the Americas, this joint venture will bring the global xScale data centre portfolio to more than $7.5 billion across 34 facilities, and an expected greater-than-675 MW of power capacity when completed and fully constructed. To date, six xScale data centres have been opened in Asia–Pacific, EMEA and LATAM, including TY12x in Tokyo, PA8x and PA9x in Paris, LD11x and LD13x in London, and SP5x in São Paolo, with more currently under development.
Charles Meyers, President and CEO of Equinix, forecasts that as digital transformation accelerates across all industries, hybrid multicloud will become the IT architecture of choice for leading businesses. “Our new relationship with PGIM Real Estate follows our successful partnership with GIC and will enable the world’s largest hyperscalers to expand within the Equinix ecosystem in Australia,” Meyers said.
Equinix is a leading data centre provider in Australia with 17 International Business Exchange (IBX) data centres, which will increase to 18 when the PE3 in Perth opens later this year. Under the terms of the agreement, PGIM Real Estate will own an 80% equity interest in the joint venture, and Equinix will own the remaining 20% equity interest. The joint venture is expected to close in Q4 2021, pending regulatory approval and other closing conditions. PGIM Real Estate will contribute market insight and support to the joint venture, with its knowledge of local real estate equity and debt markets applied by its experienced professionals across 31 offices worldwide. Deploying research-led initiatives such as this new program with Equinix, PGIM Real Estate will strive to deliver exceptional performance for its partners and investors. Citi served as exclusive financial advisor to Equinix in connection with this transaction.
Eric Adler, Chief Executive Officer of PGIM Real Estate, said the partnership with Equinix is a highly symbiotic venture between two market-leading firms with complementary business models and global capabilities. “We are extremely pleased to partner with Equinix on this investment in Sydney, and we look forward to expanding this strategic relationship in other markets, thereby providing our investors further access to the increasingly important digital infrastructure sector,” Adler said.
With xScale data centres in Australia, hyperscale companies can add core deployments to their existing access-point footprints at Equinix, enabling their growth on a single platform that can immediately span 65 global metros and offer direct interconnection — within robust ecosystems — to their customers and strategic business partners. Currently, Platform Equinix features more than 40% of the private on-ramps to top global cloud service providers. Jabez Tan, Head of Research for Structure Research, noted that Australia is set to build out its next wave of capacity, with the hyperscale market expected to grow about double the rate of the retail segment by 2026, adding that there have been unprecedented levels of cloud adoption in the country. “Equinix’s expansion into Australia’s hyperscale market is a timely move to address the aggressive demand among hyperscalers in Australia and will further accelerate digital transformation in the country,” Tan said.
For years, the world’s largest cloud service providers, including Alibaba Cloud, Amazon Web Services, Google Cloud, IBM Cloud, Microsoft Azure and Oracle Cloud Infrastructure, have partnered with Equinix to leverage its global platform of more than 230 data centres to directly connect to their strategic business partners and customers. With the xScale program, these hyperscalers can continue to grow at Equinix, in close proximity to an ecosystem of 10,000 customers. The xScale program in Australia will enable enterprises to directly connect and operate in proximity to the largest global cloud operators to build and grow their hybrid multicloud infrastructure.
Equinix’s long-term goal of using 100% clean and renewable energy for its global platform has resulted in significant increases in renewable energy coverage globally. Equinix has continued to make advancements in the way it designs, builds and operates its data centres with high energy-efficiency standards, and all xScale data centres are expected to be LEED certified (or the equivalent regional certification).
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