Microsoft has paid $131.2M for a 14ha site on Mamre Rd Kemps Creek for a massive new Data Centre in Western Sydney.
Microsoft submitted a Development Application for the site at 769 Mamre Rd in September last year proposing a $1.3bn development comprising a 190 megawatt facility offering 60 data halls within two two-storey buildings together with an electrical substation, 31 generators and associated office space covering over 61,000sqm in total GFA. The plans also indicate a third data centre could be built in the future.
The site was sold by the ARET Frasers Project Trust which is developing a larger precinct in conjunction with Altis who consolidated the sites at a raw cost of circa $175/sqm.
Microsoft will pay $935/sqm for the site, cementing a significant profit for the Frasers joint venture who will continue to have servicing obligations for the site.
Microsoft locked up the site in November 2020 and settled the site at the end of May 22.
The EIS accompanying the application said that global data traffic increased by 49% during 2019 due to the surge in demand from increased levels of remote working during the COVID-19 pandemic; however, this has also generated significant requirements for additional data centre capacity in the long-term. The rapid global increase is projected to continue to grow 31% a year to 2025. According to a CBRE report, demand for data centres in Sydney increased by 76 per cent (2018-2019) (compared to only 34% in Tokyo, 27% in Hong Kong and 14% in Singapore).
According to the CBRE report, demand was demand was led by gaming, over-the-top media services, online content and streaming providers, while other major demand drivers included global technology services companies, which continue to cater for growing corporate requirements for remote working and other virtual arrangements and financial sector firms, which are also displaying a strong appetite for colocation requirements and cloud storage.
“Data centres continue to lure investors keen to avail of the opportunities resulting from massive demand for data storage and computation,” said Dr. Henry Chin, Global Head of Investor Thought Leadership and Head of Research, Asia Pacific, CBRE.
“The asset class also offers prospects for diversification and enhanced risk-adjusted returns. With operational risk and securing planning approvals remaining a challenge, CBRE advises investors to form partnerships with experienced data centre operators, especially second tier groups looking to expand their scale and capacity,” he continued.
Other key trends identified in the report included an uptick in demand for edge data centres, which are smaller facilities located close to users and serving a small, limited area.
Download the full CBRE report here.