Earlier this week, Macquarie Technology Group engaged its investors about a promising 150MW data center project. As digital demands surge, driven by AI and cloud services, the company is considering diverse funding avenues. The proposed data center campus could cost up to $3 billion, excluding land. For the financial muscle, they’re contemplating capital recycling and joint ventures.
During an investor call, CEO David Tudehope offered insights into potential financing strategies. “Funding for the new campus […] will come from recycled capital from the existing data centers and/or a development partnership,” said Tudehope. He acknowledged that while these financing models are widespread abroad, they are relatively novel in the Australian landscape.
Macquarie had already secured a Sydney land deal valued at $240 million. This acquisition will be financed through existing cash reserves and debt. Consistently investing in data centers since 2018, their Sydney IC3 East facility, offering 12MW, stands testament to their commitment. This facility will further expand with the IC3 Super West, scheduled to conclude by late 2026, raising capacity to 65MW.
In a bold move last year, Macquarie expanded its loan facilities to $450 million. This strategic financial maneuver underscores their growth trajectory in this space. Combining their existing assets with the planned 150MW expansion would firmly place Macquarie among Australia’s leading data center providers.
The appealing prospect of greater capacity and capabilities excites many in Australia’s telecommunications sector. Yet, the potential risks can’t be overlooked. Financing colossal infrastructure projects inevitably involves economic forecasts and interest rates impacts. Additionally, joint ventures can demand intricate negotiations.
