Equinix Launches $15B JV for Hyperscale Data Centers
Equinix has formed a new joint venture with GIC and the Canada Pension Plan Investment Board, intending to raise more than $15 billion for the development of hyperscale data centers. The partnership will acquire land across the U.S. where it will build campuses of at least 100 megawatts and expects to reach a total capacity of 1.5 gigawatts.
Under the terms of this agreement, GIC—Singapore’s sovereign wealth fund—and CPP Investments will each control a 37.5 percent equity interest in the venture, with the remaining 25 percent controlled by Equinix.
Morgan Stanley & Co. LLC served as exclusive financial advisor for Equinix, while Latham & Watkins LLP worked on behalf of CPP Investments. Closing is expected in the fourth quarter, subject to regulatory approvals.
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Equinix seeks to expand its xScale product, which is tailored for the unique workloads of large cloud service providers and other hyperscale customers, including AI applications. Although it is present in virtually all major U.S. markets, the California-based REIT currently has only one xScale data center in the nation, in San Jose, Calif. In April, it entered a $600 million joint venture with PGIM for its development.
According to its second quarter earnings report, the global data center company also acquired a 200-acre parcel in metro Atlanta, where it will develop a multihundred-megawatt xScale campus. The firm aims to build all its xScale facilities to meet LEED certification.
An $8 billion global footprint
Equinix’s existing xScale portfolio totals more than $8 billion in commitments. This includes 35 hyperscale facilities in various stages of development, encompassing more than 725 megawatts of capacity at full build-out.
The REIT has multiple similar partnerships across Europe, Asia-Pacific and the Americas. This is the first time it partnered with CPP Investments, but it has a long-standing relationship with GIC. It first joined forces with the Singaporean sovereign wealth fund in 2019, and in 2020 it established another $1 billion joint venture to develop data centers in Japan. Another, $3.9 billion global venture followed in 2021, and a few others since then.
AI accelerates investments in digital infrastructure
The global race to accommodate AI deployments has prompted multiple institutional investors to pour billions in the hyperscale data center market, such as Prologis and Blackstone. And this year has seen a few major deals take shape.
Most recently, Blue Owl Capital, Chirisa Technology Parks and PowerHouse Data Centers formed a $5 billion partnership to develop AI and HPC facilities across the U.S. The same month, EdgeCore secured $1.9 billion in equity, its third round of financing this year.
The above were on the heels of many other similar 2024 deals, with investments continuing to grow. In a CBRE investor survey released in June, 97 percent of respondents said they plan to increase their capital deployments in the data center sector this year. Furthermore, 92 percent of them expect to invest at least $100 million, 44 percent aimed for $500 million and up, while 17 percent said they will pour more than $2 billion in such assets.
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