This week, Vantage Information Facilities accomplished a $9.2 billion fairness funding to fund Vantage’s development throughout North America and EMEA, accelerating and lengthening the corporate’s strategic capabilities to companion with world hyperscalers in assembly unprecedented cloud and AI demand.
Silver Lake and world various asset supervisor DigitalBridge Group managed the funding autos.
The elevate was considerably oversubscribed and upsized by $2.8 billion with participation from a number of world buyers.
READ ALSO: How AI is Boosting the Information Heart Market
Mixture new funding in Vantage over the previous 9 months totals roughly $11 billion, of which greater than $7 billion is main fairness. That features a €1.5 billion ($1.6 billion) funding by Australian Tremendous in September 2023.
Main proceeds shall be used to fund Vantage’s development throughout North America and EMEA, accelerating and lengthening the corporate’s strategic capabilities to companion with world hyperscalers in assembly unprecedented cloud and AI demand.
Vantage owns or controls greater than 25 websites in North America and Europe, the Center East and Africa, totaling over 3 gigawatts of anticipated capability. The corporate anticipates that the brand new funding will drive an estimated $30 billion of further improvement.
Demand outpacing provide
Carl Beardsley, senior managing director and JLL Capital Market’s Information Heart chief, advised Industrial Property Government the info heart sector continues to draw giant fairness commitments.
“Demand is much outpacing provide, emptiness is at an all-time low, and lead instances to acquire scalable energy at these websites is a problem,” Beardsley mentioned.
“Information heart builders usually like to amass and construct multi-building campuses which had been traditionally constructed over time however with the expansion within the sector, we’re experiencing pre-commitments from finish customers on full campuses. This has pushed ahead the event cycle of knowledge heart campuses and the necessity for extra fairness at a faster tempo.”
Howard Berry, principal, Nationwide Information Heart Options with Avison Younger, advised CPE that buyers are displaying a robust curiosity in information facilities attributable to record-low emptiness charges of two % in North America and a projected tripling of the present 14 GW capability to 60 GW over the following 5 years.
“This development is pushed by the rising demand for AI and enormous language fashions,” Berry mentioned. “For instance, a typical AI information heart tenant will spend over $50 million on GPU chips for each 1 MW of deployment, and there’s 1,000 MWs in a GW. As digital transformation continues, the necessity for sturdy and scalable information storage and processing options will doubtless maintain investor curiosity within the sector for the foreseeable future.”
CommercialEdge’s Doug Ressler confirms the curiosity buyers are seeing in information facilities, which may present steady rental revenue attributable to long-term leases with tenants.
As AI information heart demand grows, property values could respect over time, and investing in information facilities diversifies an actual property portfolio past conventional asset lessons.
As an actual property funding, information facilities supply tax advantages, together with depreciation deductions.
AI’s ‘simply in its infancy’
Robert Martinek, director at EisnerAmper, advised CPE that almost all market contributors consider that AI is in its infancy and world information heart electrical energy demand might double over the following 4 to 5 years.
“Information heart demand from buyers commenced with the emergence of Bitcoin mining,” Martinek mentioned. “Currently, demand has been straight fueled by the rise in synthetic intelligence. Since AI requires huge power consumption, information facilities have seen vital will increase in occupancy and rental charges through the previous 12 to fifteen months.”
The demand within the U.S. financial system for providers similar to AI and cloud computing is excessive and is predicted to proceed for many years, Johnathan Meade, chief working officer at Meade Engineering, advised CPE.
“Information facilities present the required infrastructure to assist the following wave of the technological revolution,” he mentioned.
