NEXTDC (ASX: NXT) has announced plans for a seventh data centre for Sydney, and possibly its largest, after acquiring a 25.8ha site at Eastern Creek for $353 million.
The site is earmarked for the company’s proposed S7 data centre and was among two properties that NEXTDC previously had under evaluation in Sydney.
NEXTDC says it has entered into a purchase agreement for the site which comprises multiple lots and is located about eight kilometres from its proposed S4 data centre at Horsley Park, currently in the planning stage.
“Both sites represent a significant expansion opportunity in the Western Sydney Availability Zone,” says the company.
“The S7 site covers approximately 258,000sqm of developable land area and is in close proximity to a major electricity substation as well as telecommunications, utilities, and associated public infrastructure.”
Subject to development approval, the S7 facility is expected to accommodate a data centre with about 550MW of data capacity, in addition to housing the company’s mission critical operation centres for customers, its administrative offices and collaboration spaces.
The proposed 550MW capacity compares with NEXTDC’s current target of 504.3MW of total power either planned, in development or in operation from seven sites in NSW and ACT.
The company’s existing pipeline of developments are ultimately targeted to boost NEXTDC’s portfolio to more than 1GW of power which compares with current built capacity of 165.1MW.
The latest acquisition follows a $550 million capital raising by NEXTDC announced last month, primarily for the acquisition of targeted development sites in Asia amid plans to double the size of its business globally.
The Brisbane-based NEXTDC says that, subject to conditions being met, the company will progressively settle on the S7 land parcels across FY25.
The company says it will not attribute the S7 property’s holding costs in its FY25 underlying EBITDA guidance “due to the uncertainty over the timing and quantum of such costs pending completion of the purchase”.
The acquisition is part of a capital expenditure program that ranges from $1.3 billion to $1.5 billion for the company, a target that it says remains unchanged.
NEXTDC currently has 17 fully operational data centres in Australia, with one each in New Zealand and Malaysia under development. Seven centres are in the planning stages, including six in Australia and one in Tokyo.
A further seven are under evaluation, including the new Eastern Creek data centre, although most of those under evaluation are offshore - comprising a second data centre for Tokyo and one each in Malaysia, Thailand and Singapore.
NEXTDC posted a $10.6 million increase in underlying EBITDA for FY24 to $204.3 million, above the higher end of its $200 million guidance amid surging demand for data centre services.
Net revenue also beat forecasts after rising $28.5 million, or 10 per cent, to $307.9 million.
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