NEXTDC boosts portfolio with new data centre

Data centre owner NEXTDC has expanded its portfolio with the planned construction of a complex in Sydney’s north to cater for the surging need for data storage and processing requirements.

It has been identified as a growth sector for property investors from private developers to listed trusts. Working from home and online shopping have underpinned the growth.

Centuria Industrial REIT identified the growth potential of the sector last year when it bought Telstra’s data centres in a $417 million deal, while Macquarie Data Centre has a new $85 million site in Sydney and one earmarked in Canberra.

Renders of the NEXTDC S3 data centre located in Artarmon on Sydney’s lower North Shore, with Multiplex to deliver stage 1

In the latest deal, construction company Multiplex has been appointed by the ASX-listed NEXTDC to deliver stage one of the S3 data centre located in Artarmon on Sydney’s lower North Shore. It will join the group’s 30 megawatt facility in Macquarie Park, which achieved full fit-out in July 2020.

NEXTDC is a $4.9 billion group specialising in the software and services sector.

The Artarmon site at 2 Broadcast Way, will be 34,000 square metres over eight storeys and deliver more than 20,000 square metres of IT space. This will comprise about 26,770 square metres of data halls and ancillary infrastructure.

Designed by architects Greenbox, the project will also include a range of amenities for tenants including workspaces, collaboration zones, car parking and over 4000 square metres in office space.

S3 Sydney is the third and largest NEXTDC data centre in Sydney and will directly interconnect to the existing S1 and S2 Sydney data centres.

Multiplex NSW regional managing director David Ghannoum said the group had completed a new site in Perth for NEXTDC, and said he was “excited to draw upon our experience building ground-breaking high-rise data centres and help expand NEXTDC’s world-class operation of data centres across Australia”.

In a report late last year from CBRE, it says end-user demand for data centres remained robust in the first half of 2020, supported by the adoption of Big Data, Industry 4.0, Internet of Things, 5G and cloud computing.

“There has also been a surge in data storage and processing requirements resulting from increased levels of remote working during the COVID-19 pandemic, which has also generated significant requirements for additional data centre capacity,” Kate Bailey, associate director, CBRE research, Australia said.

“Investment demand has strengthened this year as economic and property market volatility caused by the spread of COVID-19 prompts buyers to seek assets providing stable income streams.”

Ms Bailey said equity investment remained the preferred route into the sector, with recent transactions including the purchase of an 88 per cent stake in AirTrunk, a hyperscale data centre company based in Sydney, by a consortium led by Macquarie Asia Infrastructure Fund.