Equinix and PGIM Real Estate aim to Upscale US Data Centres

Equinix and PGIM Real Estate have entered a US$600m joint venture to develop and operate the first xScale data centre in the US to boost connectivity

Whilst data centres continue to transform the digital world, increasing numbers of investors around the world are looking to put their money into data centre companies.

One recent example is PGIM Real Estate, the real estate investment and financing arm of the asset management business, PGIM, who this week (April 2024) entered a joint venture with leading data centre company Equinix.

The multi-million dollar joint venture aims to develop the first xScale data centre in California, US. xScale data centres aim to provide access to a comprehensive suite of interconnection and edge services that integrate into a hyperscale company’s existing access points.

SV12x, the proposed two-story facility, is expected to provide more than 28 megawatts (MW) of power capacity once completed in Q2 2024. It will be located in Equinix’s data centre campus in San Jose, California, alongside its four existing International Business Exchange (IBX) data centres.

Optimising hyperscale data centre offerings

This marks the second joint venture between Equinix and PGIM Real Estate, with the companies having first collaborated in 2021 to develop and operate two xScale data centres in Sydney, Australia at a cost of US$575m.

PGIM Real Estate has strategically made this decision to invest further in its global data centre strategy, having first started investing in the sector in 2023. Its agreement with Equinix is part of its new strategy roadmap to invest exclusively in hyperscale data centre facilities around the world, including in the US, Europe and Asia-Pacific.

Hyperscale data centres are significantly larger than enterprise data centre facilities. They are designed to support robust, scalable applications for businesses and are often associated with leading global technology giants, including Google, Amazon, Microsoft and IBM.

Equinix’s xScale data centres aim to enable hyperscale companies to add core deployments to their existing footprint at Equinix IBX data centres. This works to better enable their growth on a single platform to offer businesses better interconnectivity to an ecosystem of more than 10,000 customers.

The data centre provider has also been seeking to improve its growth strategies, having digitally transformed to keep up with customer demands for technologies like artificial intelligence (AI). 

Other partnerships that the company has entered into include Nvidia in January 2024 to transform AI supercomputing, in addition to French company wpd in February 2024 to help decarbonise the grid in France.

Currently, PGIM Real Estate owns an 80% equity interest in this new joint venture, alongside Equinix’s 20%. This joint venture will bring the global xScale data centre portfolio to more than US$8bn across more than 35 facilities at an expected power capacity of 725MW when fully completed.


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