Microsoft has paid $133m for two properties in Sydney for the development of 2 new datacentres.
The properties at Lane Cove and Huntingwood were both settled on the 21st December.
Whilst Microsoft are yet to make any announcements on the acquisitions, it is possible that in maintaining commitment to the Australia Federal Government, Microsoft will develop its own Data Centres to host crucial government information.
In early 2019, the Governments Digital Transformation Agency (DTA) unveiled its hosting strategy which requires a two-level certification system for Government held data.
To be certified as a ‘Sovereign Data Centre’ a facility’s owner will have to allow the government to set out certain ownership criteria for it and may impose penalties if a change in ownership or control of a facility occurred. If Microsoft were renting data centre space through another providor, it may not be able to control the Sovereign Data Centre status and potentially risk losing key government contracts.
The acquisitions are likely to be of concern to existing data centre operators NextDC and Canberra Data Centres who have each expanded production to cater for Microsoft’s growing needs.
The larger 5ha parcel at 6 Honeman Cl Huntingwood is currently a heavily vegetated vacant parcel of land fronting the Great Western Highway. The site was acquired for $70.4m.
The site is zoned General Industrial and was previously the subject of an application for the development of a service station and 3 lot sub division. The site contains an area of Cumberland Plain Woodland, which meets the criteria for the Critically Endangered Ecological Community and as such any development of the land will require special permits.
The Lane Cove site, at 706 Mowbray Rd, was acquired for $63m from VIMG (Vic Investments Management Group). The 1.7ha property comprises a multi-tenanted office warehouse building with three floors of office space, rear warehouse units (total 17,204sqm of NLA) and an abundance of undercover and external car parking spaces.
The Lane Cove site is situated about 500m from the large AirTrunk Data Centre being developed in Sirius Rd. AirTrunk paid $51.5m for the 4 ha site and are currently constructing a four-storey data centre covering more than 34,000sqm across 19 data halls, of 1330 square metres each.
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