Data centre deal a win for Centuria offices
Centuria has made an “early mover” investment into a specialised data centre space – an act set to greatly benefit its office portfolio.
However the new business line – a 50 per cent stake in the two year old Reset Data Pty Ltd (ResetData) – is mainly set to boost the company’s revenue stream.
The outlay is $21 million which the manager will fund using debt facilities.
ResetData has also entered into a 10 year lease for a c600 square metre space at an A-grade Centuria office – 818 Bourke Street, Docklands – to repurpose as a 1.5 MW centre.
The rental agreement could see the value of that property increase 10-15 per cent, a Centuria spokeperson said.
More ResetData deals in vacant Centuria offices are expected.
“This is an exciting opportunity to partner with a leading $21 billion Australasian real estate funds manager, which provides the means to scale our new generation data centre offering throughout Australia and New Zealand, beginning with 818 Biurke Street…one of Australia’s first Liquid Immersion AI inferencing and ultra-high-density data centres,” ResetData joint chief executive officers, Bass Salah and Marcel Zalloua, said.
AI factories of tomorrow – in offices
Centuria joint chief executive officer Jason Huljich described the proposed data centre investments as “the AI factories of tomorrow” with LIC technology needing less space and resources than traditional product.
This would reduce their carbon footprint too, he added.
“Most importantly, this is technology that fits within existing office floorplates while generating significantly higher rents per square metre compared to typical office occupants,” according to the executive.
“A critical consideration in entering the ResetData investment opportunity is the value creation potential we see across our direct and listed real estate portfolios,” Mr Huljich said (story continues below).
“Centuria’s investment in ResetData enables the group 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.
“Depending on asset suitability, Centuria expects that the acquisition will provide opportunities to enhance 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.”
“A 2.4sqm LIC pod produces 140kW, meaning 100sqm of ‘white space’ within an office floorplate could potentially house up to 1.5MW of capacity. In comparison, a traditional 1.5MW data centre would require approximately 1,000sqm of white space.
“The LIC system benefits from a reduced carbon footprint, with zero water waste compared to c.13,000GL per annum for air cooling systems. LIC also provides a 31% reduction in carbon costs”.
818 Bourke St is held by the Centuria Office Fund.
Early mover investment: Centuria
ResetData has partnership with, amongst others, Dell, Nvidia, Submer and Unicom Engineering, the executive added.
“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,” other Centuria CEO, John McBain, said.
“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.”
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