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Specialist fund manager Centuria Capital (ASX: CNI) is acquiring a 50 per cent stake in new-generation data server provider ResetData for $21 million, giving the group a foothold in the emerging “liquid immersion cooled” technology space while enhancing revenue streams for its property funds.
Centuria says the deal gives the group early-mover advantage into the new liquid cooling technology employed by ResetData which provides substantial environmental and cost benefits over air cooling for data centres.
It also gives the funds manager exposure to an Australian cloud services sector that expected to be worth more than $23.2 billion this year, up 19.3 per cent in the past year.
The Sydney-based ResetData has existing partnerships with Dell, Nvidia, Submer and Unicom Engineering to provide Original Equipment Manufacturer capabilities for liquid immersion cooling (LIC) technology which the group says provides a smaller footprint than traditional data centres, less energy consumption than those using air cooling servers and a lower carbon footprint.
The ResetData technology can be retrofitted into existing office buildings which Centuria sees as key to enhancing returns from this property sector.
“A critical consideration in entering the ResetData investment opportunity is the value creation potential we see across our direct and listed real estate portfolios,” says Jason Huljich, the joint CEO of Centuria.
“The group investment in ResetData enables Centuria to unlock value from vacancies within our office portfolio by establishing a network of edge data centres that can service tenants as well as other businesses in proximity.
“The acquisition enhances rental streams and property valuations for our property funds, in addition to providing our tenants with access to local cloud storage with enhanced ESG credentials.”
Kicking off the partnership, ResetData has secured a 10-year lease, for capacity of up to 1.5 megawatts, in the Centuria-managed Melbourne office building at 818 Bourke Street, Docklands, which is owned by Centuria Office REIT (ASX: COF).
A 2.4sqm LIC pod produces 140 kilowatts, which means an office floorplate of about 100sqm could potentially house 1.5 megawatts of capacity. Centuria says this compares with a traditional air-cooled data centre of 1.5 megawatts, which would require about 1,000sqm of space.
The funds manager plans to transform the Docklands property into one of Australia’s “first AI inferencing and ultra high-density LIC data centres”, with the company touting the potential of this partnership to lift select property valuations by 10 to 15 per cent net of costs.
“We view our early investment in ResetData as presenting an early mover opportunity in a rapidly growing sector, providing new revenue growth and a point of difference for Centuria’s real estate platform,” says John McBain, Centuria’s joint CEO.
“Centuria’s corporate acquisition strategy seeks real estate market opportunities that provide strong tailwinds and limited competition, similar to our investment in real estate private credit back in 2021 with our initial investment in Centuria Bass Credit.”
Centuria Bass Credit is a joint venture between Bass Capital Partners and Centuria Capital Group secured by the group in April 2021.
Centuria says its investment in ResetData will be funded via existing debt facilities and is expected to be earnings neutral in FY25.
The funds manager has also secured a call option to acquire the remaining 50 per cent of ResetData within five years.
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