Equinix, in collaboration with GIC Real Estate and CPP Investments, is set to raise over $15 billion for data center developments in the U.S., aiming to expand its xScale portfolio and address the growing demand driven by cloud computing and AI.
Equinix, a leading digital infrastructure company, has embarked on a significant venture in partnership with Singapore’s GIC Real Estate and the Canada Pension Plan Investment Board. This collaboration aims to cumulatively raise an impressive sum exceeding $15 billion for the development of data centers across the United States. This joint undertaking builds upon a previous partnership between Equinix and GIC established in Europe three years prior, with the goal of expediting the expansion of Equinix’s xScale data center portfolio. As of August, this initiative had already amassed $4.7 billion. The surge in demand for cloud computing and artificial intelligence has catalyzed a notable increase in data center construction, according to research data from CBRE. With the financing secured, Equinix anticipates that the joint venture will procure land for new xScale facilities, situated on multi-hundred-megawatt campuses, ultimately adding over 1.5 gigawatts of fresh capacity for hyperscale clients. This significant capacity expansion represents the ability to power up to 1.35 million homes based on the 900 homes per megawatt ratio. Recently, Equinix finalized land purchases for its inaugural multihundred-megawatt xScale campus in Atlanta, along with another site in Dallas. Adaire Fox-Martin, the Chief Executive Officer and President of Equinix, highlighted the necessity for extensive data center facilities as global corporations expand their infrastructures to support critical workloads, most notably in artificial intelligence. Furthermore, data center availability in primary markets saw a notable uptick of 10%, equating to 515 megawatts in the first half of the year, and exhibited a remarkable year-over-year growth of 24%. The construction output in these markets reached an all-time high of 3,872 megawatts, rising 69% compared to the same period last year. Despite this increase in supply, the overall vacancy rate in the data center market dipped to record lows, driving prices upwards and attracting substantial capital investments into the sector, as emphasized by CBRE’s findings. Max Biagosch, a senior managing director at CPP Investments, remarked, “This investment will help meet the increasing demand for data centers driven by rapid technological advancements and marks a significant step forward in our broader data center strategy.” Equinix’s collaboration with GIC is longstanding, spanning xScale projects across various global regions including Asia, the Americas, and Europe. This recent agreement represents the inaugural joint venture between Equinix and CPP Investments. According to the terms of this agreement, both CPP Investments and GIC will hold a 37.5% equity stake in the venture, while Equinix will hold 25%. Each party has committed equity, with plans to additionally leverage debts to amplify the total capital pool to over $15 billion. The establishment of this joint venture is contingent upon acquiring necessary regulatory approvals, which are forecasted to be secured in the fourth quarter.
The increasing significance of data centers in the face of rising technological advances, particularly in cloud computing and artificial intelligence, has transformed them into critical infrastructure components for enterprises globally. The evolution of the digital landscape has spurred a surge in demand for data center resources, necessitating substantial investments and innovations in the sector. With Equinix’s strategic partnerships and focus on expanding its xScale data center portfolio, the aim is to address this surging demand effectively. Stakeholders such as GIC and CPP Investments are pivotal in facilitating the required financial backing to empower the creation of expansive and efficient data center capabilities, thus contributing essential infrastructure that undergirds modern digital operations.
The strategic collaboration between Equinix, GIC Real Estate, and CPP Investments represents a monumental step in the development of U.S. data centers, aimed at meeting the escalating demand driven by advancements in technology. With an ambitious goal of raising over $15 billion, this joint venture leverages existing partnerships and an expanding xScale portfolio to facilitate a significant increase in capacity for hyperscale customers. As the demand for data center resources continues to surge, this initiative stands to play a pivotal role in shaping the future of digital infrastructure.
Original Source: www.costar.com
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