Di Pilla’s plans for HMC Capital’s $2bn-plus data centre splurge

Exposure to data centres is in strong demand. Picture: iStock

More investment banks are expected to capitalise on David Di Pilla’s play on the data centre play, with speculation that he plans to create both an operating company and property company for data centres if he can pull off a plan to buy at least $2bn worth of the assets through HMC Capital.

The understanding is that the hope of the Di-Pilla-run HMC Capital is to list at least one of the vehicles on the Australian Securities Exchange, likely to be the real estate investment trust.

Sources had suggested that there may be at least two banks working on one of the companies that own the real estate of the data centres for a listing, and another two on the operating entity.

However, HMC Capital said that it would not comment.

There’s talk in the market that Goldman Sachs and JPMorgan are positioned to work on the operating company, while UBS and Morgan Stanley could be well-placed to work on the REIT, but this is yet to be confirmed by HMC Capital.

The understanding is the plan could work like with Next DC, which is a listed data centre operating company, while it used to have Asia Pacific Data Centre REIT as its landlord, although those two businesses while previously were separate have now come together.

It comes after HMC Capital confirmed it is embarking on due diligence to buy Global Switch’s Australian assets.

Sources have suggested that the price is about $2bn.

Di Pilla has previously made known his plans for a listing of a digital infrastructure fund in the past, and the hope is for it to happen by Christmas.

A purchase of data centres by HMC Capital would come after Blackstone and backers paid an eye watering $24bn for the Robin Khuda-founded data centre giant AirTrunk, backed by Macquarie, PSP, which has rerated the sector.

Goldman Sachs and JPMorgan both worked on the original float of HMC Capital in 2019 and are both believed to be lenders.

The understanding is HMC Capital is also the last party standing in the contest to buy the iSeek data centres, with Queensland Investment Corporation walking away, but a $400m deal is dependent on investor backing.

The opportunity on the data centre front is to put the iSeek business together with the $1bn Fujitsu data centres in Australia, which are also for sale, and gain synergies.

Global Switch Australia has been up for sale through investment bank UBS.

On offer have been two major data centres on the western edge of Sydney’s central business district comprising 73,000 sqm of space, owned by Global Switch.

HMC Capital told the market on August 21 that it had established new growth platforms, including private credit, energy transition and digital infrastructure.

Its digital infrastructure platform was established with the acquisition of North American business StrapCap and has $700m of assets under management.

The sector is forecast to need $US1tn of capital spending by 2028 with the growing usage demands from artificial intelligence.

HMC Capital’s medium-term target was to have about $2bn of assets under management in digital infrastructure and its overall target of having $20bn of assets under management – almost doubling from its current level of $12.7bn.

HMC Capital was launched and floated with the former Masters Hardware properties sold by Woolworths before branching out with a listed healthcare real estate fund and daily needs fund.

It embarked on a $2.5bn merger with bulky goods operator Aventus, purchased $1.2bn of hospital properties operated by Healthscope and has made other acquisitions in renewable energy and real estate.