SINGAPORE (Apr 15): Data scientists are not the only ones in demand, data centres are too. On April 10, data centre specialist AirTrunk announced that it had raised $450 million in debt financing to expand across Asia-Pacific. For a start, the funds will be used to build the largest “neutral” data centre in Singapore.
The financing for this round, announced on April 10, is from Deutsche Bank, Goldman Sachs and Natixis. Robin Khuda, CEO of Australia-based AirTrunk, put in additional capital too, as did TPG Sixth Street Partners and Goldman Sachs in its capacity as an investor.
“This additional $450 million financing provides us with a strong balance sheet to pursue further growth and become the pre-eminent ‘hyperscale’ data centre operator in the region,” says Khuda.
Prior to this, AirTrunk had spent more than A$1 billion ($967 million) on two data centres: one each in Sydney and Melbourne. The Singapore data centre will be located on a 1.5ha site in Loyang. The first of its two planned phases will start operations in mid-2020. The second phase will be built when there is enough demand and total cost will be more than $500 million.
“The rapid growth of cloud and evolving needs of enterprises are driving demand for hyperscale capacity in the region. Singapore is a strategic data centre hub, owing to its economic and political stability and rich connectivity to Asia, the US and Europe,” says Michael Juniper, AirTrunk’s chief commercial officer and executive director.
AirTrunk is riding the cloud computing trend, in which data centres are critical to doing the back-end heavy lifting. Many large companies, such as the major banks, own and run their own data centres; many others rely on capacity leased by specialist providers such as AirTrunk, Equinix and Digital Realty Trust.
Data centres run by these specialist providers are “neutral” because they are not tied to any particular networks or users. By contrast, others, such as Facebook, run their own massive data centres without which they cannot deliver their digital services. Last September, Facebook announced that it was investing $1.4 billion to build its first data centre in Singapore.
For AirTrunk, the choice to start with Singapore for its first foray outside its home market is an easy one. The city state may have a tiny land area, but it has several key advantages, including internet bandwidth, ease of doing business and political stability. There are no natural disasters and energy supply is stable. According to the Cushman & Wakefield 2017 Data Centre Risk Index, Singapore was ranked top, followed by South Korea.
As at 2016, data centres in Singapore took up a total floor space of 2.3 million sq ft. This figure is set to grow to 2.5 million sq ft in 2020, estimates Structure Research. These data centres not only take up space but they also need huge amounts of electricity for their operations. From 240mw at the beginning of 2015, an additional 130mw was added two years later. Another 100mw is in the pipeline, estimates Cushman & Wakefield.
