Data centres have emerged as their own asset class in recent years
Amazon Web Services, Microsoft and Google - the world’s largest, most sophisticated and demanding end users of data centres - have such a high degree of purchasing power that data centre operators which contract with such “hyperscalers” typically contract on the tenant’s terms.
With spending on cloud services in Australia alone passing A$1.3 billion in 2020, Microsoft, Amazon and Google have embraced hosting data in Australia in order to provide Australian businesses with lower latency and the ability to host data onshore. We see a similar trend happening in other countries in the Asia Pacific region, where data onshoring regulations have necessitated the rapid expansion of data hosting capacity.
We are also seeing data centres as an asset class becoming increasingly attractive to financial investors such as pension funds and private equity houses across the Asia Pacific region and the number of platforms focusing on data centres has markedly increased over the last few years.
As the need for storage and data centres surges within Australia and the Asia Pacific, you can be assured King & Wood Mallesons is at the forefront of providing legal advice for this sector and has a deep understanding of the legal and regulatory environment surrounding the financing, construction and operation of data centres, including how to cater for cloud computing, big data and energy efficiency in data centres.
We can provide you with expert commercial and legal advice throughout the lifecycle of your data centre projects, whether you're a developer, investor, operator, supplier, or end-user.
Our recent experience
- ASX listed Telco: A$416 million sale of the Clayton data centre in Melbourne, Victoria to Centuria. The deal took the form of a triple-net lease-back agreement, allowing the seller to retain ownership of all the IT and telecommunications equipment at the centre, as well as responsibility for any building upgrades or repairs and future capex requirements.
- AEP Investment Management and Keppel T&T: Shariah compliant acquisition and financing of the iSeek Enterprise Data Centre in Brisbane Queensland and the Gore Hill Data Centre in Sydney, New South Wales.
- Consortium: financing of AirTrunk to fund the construction of hyper scale data centres in Australia as well as due diligence on electricity aspects of the AirTrunk data centre project in Victoria for an institutional client.
- Princeton Digital Group (a Warburg-backed platform): acquisitions of five data centres from XL Axiata (one of the largest telecoms operators in Indonesia), together with associated joint venture and master services agreement arrangements with XL Axiata; and the acquisition of a large data centre in Singapore.
- A leading private equity-backed platform specialising in data centres: proposed acquisition of multiple data centres in the Philippines from one of the leading telecoms operators together with associated joint venture and master services agreement arrangements with that telecoms operator.
