PGIM Real Estate Hits $2B Final Close of Maiden Global Data Centre Fund

PGIM Real Estate has reached the final closing of its first global data centre fund, having secured $2 billion in committed capital.

GDCF is pursuing a build-fill-sell strategy focused on the low-latency hyperscale segment and targeting opportunistic investment returns, the property funds arm of US finance giant Prudential said Wednesday in a release. The vehicle is overseen by a portfolio management team led by Morgan Laughlin, global head of data centre investments at PGIM Real Estate.

Since its first closing in 2023, GDCF has developed a geographically diversified portfolio of assets across data centre markets in North America, Asia Pacific and Europe, according to the announcement. PGIM made its first APAC data centre investment in 2021 after forming a $575 million joint venture with US heavyweight Equinix to develop and operate facilities in Sydney.

“Successfully reaching our $2 billion target raise is an important milestone that reflects strong investor confidence in the sector and our strategy,” Laughlin said. “Data centres are at the heart of the digital framework that is playing an increasingly critical role across our economy and society. In line with the recognition of the importance of digital infrastructure in our modern lives, global investors are rapidly increasing their exposure to the sector.”

Dry Powder at the Ready

More than $450 million in equity capital has been committed to PGIM Real Estate’s data centre investments to date, the firm said, adding that GDCF retains a strong pipeline of opportunities to allow deployment of the remaining capital within the next 18 months. PGIM described the fund’s backers as “a range of global investors”.

In 2022, Equinix and PGIM announced the opening of their first xScale data centre in Sydney, called SY9x. As the first of two data centres to be developed and operated under the JV, SY9x provides more than 14 megawatts of power capacity and will be scaled up to more than 28MW when fully built out.

The announcement of the Equinix partnership came after PGIM raised a total of $1 billion for its 2021-vintage fourth APAC value-add fund, which included data centres as one of its primary targets for acquisitions, after the fund manager had made earlier ventures in the sector in the US and Europe.

“We see a significant opportunity to develop expertise in the data centre space and create a wider digital infrastructure platform,” PGIM Real Estate co-CEO Raimondo Amabile said this week. “Data centres, and other associated digital infrastructure, offer a generational investment opportunity as the digital demands of our societies and economies continue to expand at an astounding pace.”

Hyperscale Race

PGIM’s latest fundraise comes after Equinix last year teamed with Singapore sovereign giant GIC and the Canada Pension Plan Investment Board to develop data centre campuses in the US, with the partners aiming to raise over $15 billion to fund construction of hyperscale facilities that will eventually provide more than 1.5 gigawatts of capacity.

Under the terms of the agreement announced in September, GIC and CPPIB hold a 37.5 percent interest in the JV, with Equinix taking the remaining quarter stake. In addition to the partners’ equity commitments, the venture also expects to take on debt to raise its total investable capital to more than $15 billion over time.

Toronto-based CPPIB had previously revealed that it was joining forces with private equity titan Blackstone on the $16 billion acquisition of Australia-based data centre platform AirTrunk, with the deal ultimately closing in December.