Equinix, PGIM Real Estate to Establish $575M Joint Venture in Australia

Global data center colocation provider Equinix will establish a US$575 million joint venture with PGIM Real Estate, the real estate investment and financing arm of Prudential Financial’s global asset management business. It’s meant to develop and operate two xScale hyperscale colocation data centers in Sydney, Australia.

According to the terms of the agreement, PGIM Real Estate would possess an 80% ownership stake in the joint venture, while Equinix will own the remaining 20% stake. The joint venture is scheduled to conclude in the fourth quarter of 2021, subject to regulatory approval and other closing conditions.

The joint venture’s new to establish SY9x and SY10x data centers will deliver more than 55 megawatts (MW) of power capacity to meet the unique core workload deployment demands of a select set of hyperscale enterprises, including the world’s top cloud service providers. Sydney’s first xScale data center, SY9x, is set to open in the first quarter of 2022.

675MW Data Center Capacity

When combined with Equinix’s current hyperscale joint ventures in Europe, Asia-Pacific, and the Americas, the global xScale data center portfolio will be worth more than $7.5 billion, with a total capacity of more than 675MW when completed and completely developed.

In Asia-Pacific, EMEA, and LATAM, six xScale data centers have opened so far, including TY12x in Tokyo, PA8x and PA9x in Paris, LD11x and LD13x in London, and SP5x in So Paulo, with more in the works.

The xScale program in Australia will allow enterprises to directly connect and operate in proximity to the world’s biggest global cloud operators in order to create and grow their hybrid multicloud infrastructure.

“As digital transformation accelerates across all industries, hybrid multicloud is becoming the IT architecture of choice for leading businesses,” said Charles Meyers, President and CEO of Equinix. “These companies recognize 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. 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.”

Hyperscale Colocation Industry

Photo Charles Meyers, President and CEO of Equinix
“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,” said Charles Meyers, President and CEO of Equinix.

From 2021 through 2026, Structure Research predicts that the hyperscale colocation industry in Sydney and Melbourne would expand at a compound annual growth rate (CAGR) of 22% in terms of built-out critical MW capacity. 1 Hyperscale companies can add core deployments to their existing access-point footprints at Equinix with xScale data centers in Australia, enabling their growth on a single platform that can span 65 global metros and offer direct interconnection to their customers and strategic business partners within robust ecosystems.

“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,” Jabez Tan, Head of Research, Structure Research. “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.”

With its extensive understanding of local real estate equity and debt markets applied through its 1,100+ experienced employees across 31 offices worldwide, PGIM Real Estate, as one of the world’s leading real estate managers, will offer market intelligence and assistance to the joint venture. PGIM Real Estate aspires to achieve excellent performance for both its partners and investors by implementing research-driven initiatives like this new partnership with Equinix.

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