SINGAPORE (July 2): GIC, a global long-term investor and manager of Singapore’s foreign reserves, is betting big on the growth in demand for data centres.
The sovereign wealth fund has agreed to enter into an 80:20 joint venture with Equinix to acquire and develop six hyperscale data centres in Europe for more than US$1 billion ($1.3 billion).
“As a long-term value investor, we are confident that the strong growth in data consumption and public cloud data storage will continue to drive secular demand for hyperscale data centres,” says Lee Kok Sun, chief investment officer of GIC Real Estate.
The move comes just weeks after GIC in June announced a partnership with data centre provider Polymer Connected to develop a data centre campus in Jakarta, Indonesia.
See: GIC partners Polymer Connected to develop data centre campus in Jakarta
As a start, the latest joint venture will see GIC and Equinix acquire two operational data centres in London and Paris, with plans to further develop four data centres in Amsterdam, Frankfurt and London.
The initial facilities in the joint venture will serve the unique core workload deployment needs of a targeted group of hyperscale companies, including the world's largest cloud service providers.
“We believe the venture portfolio, which is well-located in the primary European data centre hubs and under the management of an established partner such as Equinix, will generate steady and resilient returns in the long run,” Lee says.
Equinix will develop, operate, and manage the data centres, which, when fully developed, is expected to provide some 155 megawatts of power capacity.
Equinix says that as hyperscale companies scale their operations at its data centres, it will create a "network effect" that will benefit other customers as well as serve as a magnet to attract additional partners, application developers and other hyperscale vendors.
“Partnering with a world-class investment firm like GIC will provide the opportunity to make significant capital investments in order to capture targeted large footprint deployments while continuing to optimise our capital structure,” says Charles Meyers, Equinix’s president and CEO.
“The JV structure will enable us to extend our cloud leadership while providing significant value to a critical set of hyperscale customers,” he adds.
The transaction is subject to regulatory approval and expected to close in 3Q19.