NextDC raising AU$281 million for trio of new datacentre sites

The cash being raised will be used for future datacentres at a third location in Sydney and Melbourne, and a second site in Perth.
Written by Chris Duckett, Contributor

Self-described datacentre-as-a-service provider NextDC is continuing its return to owning its buildings and land, and is seeking AU$281 million from the market to purchase a trio of new sites around the country.

The three sites -- which would be known as S3 in Sydney, M3 in Melbourne, and P2 in Perth -- would give the company an extra 180MW of capacity, and represent the largest datacentres in NextDC's portfolio in each location, and dwarf the existing capacity in those cities.

The existing Perth P1 site has 6MW of capacity, while P2 is planned to have 20MW in total, and is set to have 1MW online after its AU$80 million first phase is complete in the first half of fiscal year 2020. The land cost for P2 was AU$22 million, NextDC said.

For Sydney, the S3 site is slated to cost AU$87 million for the land, and is currently under contract. Eventually, S3 is planned to have 80MW of capacity available, while S1 and S2 have 16MW and 30MW at the present time.

In Melbourne, NextDC's 15MW M1 and 40MW M2 sites are set to be eclipsed by the 80MW M3 site, which is currently in the due diligence stage.

"We are incredibly excited by the breadth and depth of these new investments that will further support the exponential growth of the digital economy in Australia," NextDC CEO Craig Scroggie said.

"Over time, these new infrastructure developments are expected to be the largest of their kind in Australia."

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Currently, NextDC leases the building and land at its M1, S1, P1, C1, and B1 locations, owns the building but leases the land at S2, and owns the building and land at its B2 and M2 locations.

In its latest results, the company reported a 32 percent boost in revenue for the first half of its 2018 fiscal year, experiencing a jump from AU$58.7 million last year to AU$77.5 million for the six months ended December 31, 2017.

It also reported a 41 percent jump in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) to AU$33.6 million. However, with an income tax expense of close to AU$4 million paid, compared to a one-off AU$11 million tax benefit last year, post-tax profit more than halved to AU$8.4 million.

Over recent months, NextDC has been involved in an ongoing tussle with the Asia Pacific Data Centre Group (APDC), after its ownership switched to 360 Capital in November.

NextDC has been pushing to have the real estate trust underpinning APDC wound up, stating that it is unhappy with the direction 360 Capital is taking the company under its steerage, while APDC has been looking to sell off its Australian assets for around AU$300 million.

APDC was originally created as a real estate investment trust that was responsible for the buildings and land upon which NextDC operates its business, and, under the terms of the leases, if any sale of those assets is to occur, NextDC has first right of refusal on any sale of the datacentres.

NextDC said in February it was not prepared to purchase APDC's assets for AU$280 million.

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