New York funds giant to pour $1.2b into Melbourne data centre
Global fund manager PGIM’s real estate arm has snapped up a site in Melbourne’s west with plans to pour $1.2 billion into the initial stage of development of what will be its first data centre campus in the state. It is also in the process of buying another site closer to the CBD.
The property arm of PGIM, which is the global asset management business of New York-listed Prudential Financial, acquired the 20.7 hectare site at 1 Oroya Drive in Truganina for $8 million a hectare, equivalent to a total price of around $165.6 million.
The site will join the firm’s $US2 billion ($2.8 billion) Global Data Centre Fund and continues the company’s strong investment into the sector within the Asia Pacific, adding to its pipeline which exceeds 400 megawatts across the region.
About $1.2 billion will be invested by PGIM into the first stage of the data centre hub’s development. It is in due diligence to acquire another site, understood to be closer to Melbourne’s CBD.
It has applied to the Victorian government’s Development Facilitation Program for an expedited planning pathway for the proposed data centre campus. The program, designed to fast-track significant projects by bypassing local council approval, is offered for data centre projects with a development cost of $20 million in metropolitan Melbourne and $10 million in regional Victoria.
The company’s purchase comes after Victorian Minister for Economic Growth and Jobs Danny Pearson said the state – which has around two-thirds of NSW’s total of data centres – was trying to attract data centre investment without imposing new regulations.
The Allan government announced a $5.5 million commitment for a Sustainable Data Centre Action Plan in November, as well as $8.1 million to train white-collar workers in artificial intelligence.
Attractive location
Morgan Laughlin, global head of data centre investments at PGIM’s real estate business, said Australia, particularly Melbourne’s submarket, was an attractive location for data centre development.
“Demand for digital infrastructure has remained strong with many leading hyperscalers announcing plans to develop or take up significant amount of capacity in and around Melbourne,” he said.
Laughlin said the opportunities in Australia had grown significantly larger than other markets, specific to AI projects.
“Melbourne is a big focus for that growth, largely because of the availability of power and land relative to Sydney,” Laughlin told The Australian Financial Review. “We’re capable of building a lot more than the initial 80 megawatts that we have planned, but that will be driven by future power availability.”
“While we basically have the one [in Truganina] under control, and one which I suspect we will end up acquiring, we’ll continue to look for additional sites.”
Data centre developments in the works in Victoria include Singaporean asset manager Keppel’s plans to build a $10 billion hub in Morwell, about 150 kilometres east of Melbourne, and in the proposed Gippsland renewable energy zone.
