Data is the new black

The data centre market in Australia continues to see strong growth with a new wave of supply to meet increasing demand. In the past week, NextDC (ASX: NXT) announced a $281M equity raising to purchase 3 new development sites, with UniSuper subscribing for $150M as a cornerstone investor at a 2.5% premium to the placement price. NextDC intends to use the funds to acquire a new Sydney site ($87M), a Port Melbourne site ($60M) and an East Perth site ($22M), plus costs.

The sites will allow NextDC to retain ownership of its properties, as it currently occupies 3 existing centres under lease from Asia Pacific Data Centre (ASX: AJD), also located in Sydney, Melbourne and Perth. NextDC owns 29.2% of AJD and continues an ongoing battle for control of AJD with 360 Capital Group (ASX: TGP) who own 67.3%.

In addition, the new sites will reduce NextDC’s reliance on AJD as well as providing additional capacity in a market that continues to see new data centres being established to meet market demand. Recently, Airtrunk raised an estimated $400M+ to fund a new flagship data centre in Huntingwood, Sydney NSW (September 2017) as well as a second site in Derrimut, Melbourne Victoria (November 2017).

Abacus Property Group (ASX: ABP) announced the passing of its founder and Managing Director Dr Frank Wolf. Dr Wolf had been planning on stepping down on 1 July 2018 and will be succeeded by former Federation Centres CEO Steven Sewell.