Singapore-listed Figtree has made its first strategic investment in the data center market by taking a 27.5% stake in DC Alliance, a data center owner-operator with a facility in Australia.
The provider of commercial and industrial real estate solutions paid US$2.011 million (A$2.75 million) in cash, with the aim of tapping into Australia’s multi-billion dollar data center market.
”We believe this positions Figtree well to ride on the vibrant demand for data centers in Australia, which is on the rise due to growing trends in cloud adoption, demand for smart devices as well as wireless networking technologies,” said Danny Siaw, the Managing Director of Figtree.
As part of this investment, Figtree now owns a stake in DC Alliance’s ready-for-service Tier III colocation data center in Perth’s Canning Vale industrial area.
The four-year-old data center spans 2,200 square meters, with a capacity of 1,000 racks and up to 8 MW of power.
The data center is the only one of its kind south of Perth’s Central Business District.
“Perth [is] a growing regional innovation hub due to its new high speed, high capacity undersea data cables that link it to Asia,” said Mr. Siaw.
Figtree will leverage DC Alliance’s experience in designing and building data centers to step up the value chain and broaden their recurring income base.
This landmark deal is also said to reinforce the vision of DC Alliance, a Singaporean brand with operations mainly located internationally, to be the leader in the Asia Pacific data center landscape.
“With its complementary skills in real estate across Asia Pacific, there is a lot of synergy among the two companies to accelerate our growth,” said Roy Wong, the Executive Chairman of DC Alliance.
Through its wholly-owned subsidiary DCA 1, DC Alliance acquired Pier DC, a Western Australian company that designs, builds, and operates Tier-certified data centers in Australia and the Asia Pacific region In September 2020.
Pier DC owns and operates the previously mentioned Perth-based data center, and is also a GovNext-ICT programme approved member with most of its existing customers mainly from the government segment.
Supported by Figtree, DC Alliance intends to expand the capacity of the data center as well as provide amenities like a Business Continuity space, which is highly relevant in today’s uncertain environment.
As part of the deal, Figtree will also be granted a board seat at DC Alliance, bringing its experience as developer, contractor and provider of design, project and construction management consulting services across Singapore, Malaysia, China and Australia.
Australia’s data center market is projected to grow at a compound annual growth rate of 3.4% to reach US$4.3 million (A$6 billion) between 2020 and 2025, which will likely be driven by the fact that over 90% of SMEs in Australia are expected to operate via the cloud, and over 80% of medium-sized and large data centers will be outsourcing their data center operations by 2023.
Australia is also among the top five countries in the world to implement government policies and regulations for cloud adoption, which drives data center investments in the country. Perth is ranked third behind Sydney and Melbourne in terms of data center investments.
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