AirTrunk raises $400m for construction of data centres
Singapore digital start-up AirTrunk has raised $400 million from global investment bank Goldman Sachs and private equity group TPG’s TSSP to fund the construction of its flagship centres in Sydney and Melbourne.
The company, founded by former data company NextDC chief financial officer Robin Khuda 2½ years ago, is aiming to be a significant digital landlord for cloud services across the Asia Pacific and has plans to invest up to $US1.7 billion ($1.53 billion) in data centres across the region.
The deal with Goldman Sachs and TPG’s global credit and special situations platform TSSP – which will join AirTrunk as majority shareholders – will fund the construction of two sites in Sydney and Melbourne that the company has already acquired.
AirTrunk secured the Sydney data centre site at 35 Huntingwood Drive, Huntingwood in Sydney’s west for $31 million from Frasers Australia in September 2016.
AirTrunk’s Melbourne site in Derrimut,west of the CBD. Photo: Supplied
It has since lodged a development application for a facility with eight data halls over two levels and two “tech space” areas with offices. Construction at the site has started.
In October, the company bought the another data centre site 176 Swann Drive, Derrimut, in Melbourne’s west for $15 million. A development application has been lodged with council for that site.
Data solutions
Both the sites will be hyper-scale centres and aim to provide its customers – tech giants such as Google – scalable and sustainable data centre solutions at significantly lower operating costs than its competitors, the company said.
The company is not considering buying more sites at present but says the Sydney and Melbourne sites are large enough to be expanded as demand increases. When both sites are operational in the third quarter of 2017, they will only provide 20 MW of IT load out of their total capacity of 120 MW.
“We are looking at campus-style facilities in each of these sites where there will be multiple buildings,” Mr Khuda told The Australian Financial Review.
“We had strong level of interest in our fundraising process globally, but Goldman Sachs and TSSP stood out for their support, industry knowledge and commitment ot the AirTrunk business over the long term.”
Mr Khuda has also negotiated a senior debt facility with co-debt advisors ING Bank and France bank Groupe BPCE’s financial services arm, Natixis.
Credibility doubts
Data centres have become an increasingly popular investment due to the rapid growth in secure information storage requirements among companies. Financial services, cloud computing users and telcos have become major tenants in data centres around Australia.
Doubts were cast on the credibility of AirTrunk last year due to Mr Khuda’s association with NextDC, which had a share price collapse in September.
But Mr Khuda dismissed any suspicions, saying the company and NextDC were separate.
“We’ve been through a start-up phase, now we have an office in Neutral Bay [Sydney] … we do not have offices like traditional corporates,” Mr Khuda said.
AirTrunk has a lean set-up with only 12 employees so far and outsources a lot of its work to consultants.
