Australia-based data center operator, AirTrunk is exploring fund-raising options such as Real Estate Investment Trust (REITs), asset-backed securities and equity sale on some of its data centres to raise funds for expansion, the firm’s founder and CEO Robin Khuda reportedly said last week in Singapore.
In January, w.media reported that AirTrunk is mulling a potential REIT listing in Singapore this year which could raise US$1 billion, according to Bloomberg quoting people familiar with the matter. Khuda however did not give further details when asked about the potential REIT except to say that the company is still “exploring different options” and that the Singapore Exchange (SGX) is a very attractive REIT market in Asia that hosts several very successful pure data center REITs.
Pure data center REITs in SGX include Keppel DC REIT and Digital Core REIT, backed by Keppel and Digital Realty, respectively.
The CEO told Business Times that data centers are attractive to asset-backed securities investors because these assets feature long-term contracts with very creditworthy customers. “Stabilised” data centers which are consistently getting a good cash flow or a certain level of occupancy are also appealing to pension funds which might consider purchasing an equity stake, Khuda noted.
Besides Singapore, the company also has data centres in Johor, Hong Kong, Japan and Australia with confirmed plans to enter the Middle East and India markets.
On fears of an AI bubble, the CEO reportedly said there will be short-term volatility due to unrealistic expectations but in the long-term, the market is still “significantly underinvested.”
Khuda was in Singapore to witness the launch of its new Asia headquarters at Ocean Financial Centre in conjunction with its 10th year presence in Singapore. It has three data centers in the city state, two of which are still in the pipeline.
AirTrunk has invested about S$3 billion (US$2.35 billion) to date and is prepared to invest significantly more if there is an opportunity, the CEO reportedly said. The firm aimed to treble its workforce to 350 by 2030 from the current 115.
According to the firm’s press release, AirTrunk has since 2016, committed several billion dollars of direct investment across three hyperscale facilities in Singapore totalling 180MW IT load. In August, the Blackstone-backed firm secured a landmark S$2.25 billion (US$1.75 billion), Singapore’s largest ever loan and green loan for a data center, to finance its second hyperscale data centre, SGP2.