Only three months after opening its first hyperscale facility in Asia, Equinix on Monday announced a deal with Singapore sovereign wealth fund GIC to inject a further $3.9 billion into growing the US firm’s xScale data centre programme.
Through a new set of joint ventures, Silicon Valley-based Equinix and frequent collaborator GIC aim to expand Equinix’s xScale data centre portfolio to 32 facilities globally, which will be worth more than an estimated $6.9 billion when completed, Equinix said in a release.
The JV agreements are expected to close in several waves over the course of 2021, pending regulatory approval and other closing conditions. In common with the duo’s previous partnerships, GIC will own an 80 percent equity interest in the future joint ventures and Equinix will own the remaining 20 percent equity interest.
“The joint venture arrangement of xScale enables these large deployments to be structured in an off-balance sheet model that aims to preserve capital for investment in our traditional retail data centre and digital infrastructure business and maintain our strategic and financial flexibility,” said Equinix chief executive Charles Meyers.
Equinix opened its first xScale facility in Asia, dubbed TY12x, on 1 March in Chiba prefecture just northeast of Tokyo. The project is one of several hyperscale facilities that the data centre specialist has planned for Japan after last year signing a $1 billion-plus joint venture with GIC to expand its network in the country.
TY12x will support 54 megawatts of power when all phases are complete, the company said.
The partners aim to build six of their 32 xScale facilities in Japan, with another 19 in Europe and four in Latin America. The locations of the final set of three are to be announced at a future date, with the portfolio packing a full 600MW of capacity when fully built out.
Designed to meet the needs of a targeted group of hyperscale companies, including the world’s largest cloud service providers, the xScale data centres are a complement to Equinix’s global platform of more than 220 International Business Exchange data centres.
In addition to their Japan JV, Equinix and GIC in mid-2019 formed a $1 billion venture to build and operate data centres in Europe.
In a blog post, xScale managing director Krupal Raval and Equinix chief strategy and development officer Eric Schwartz said their company has launched the development and operation of xScale data centres representing an investment of $3 billion over the last two years.
“Equinix has been building out data centre infrastructure for CSPs (cloud and IT service providers) and their partner networks and customers for more than 20 years,” the two wrote. “This new investment in global expansion will bring even more value to our customers.”
In Asia Pacific, demand for data centres is set to nearly double to 5,880MW in the next three to five years, with a further 2,838MW already under construction or in development, according to an April report from Knight Frank.
The London-based agency highlighted Shanghai (1,058MW) and Tokyo (1,008MW) for reaching “gigawatt market” status last year — putting them in the same league as leading European markets like Frankfurt, London, Amsterdam and Dublin.
Total capacity rose in all APAC markets in 2020, reaching 733MW in Singapore, 691MW in Mumbai, 663MW in Hong Kong and 648MW in Sydney, Knight Frank said.