Equinix and GIC collaborate on $1bn hyperscale data centres in Japan
The initial three facilities included in the joint venture will provide approximately 138 MW of power capacity to the Osaka and Tokyo markets when fully built-out.
Data centre firm Equinix (Nasdaq: EQIX) has announced the signing of a greater than $1 billion initial joint venture in the form of a limited liability partnership with GIC, Singapore’s sovereign wealth fund, to develop and operate xScaleTM data centres in Japan.
The three initial facilities in the joint venture – one in Osaka and two in Tokyo – will serve the core workload deployment needs of a targeted group of hyperscale companies, according to the company.
With these xScale data centres, hyperscale companies will have the ability to add core deployments to their existing access point footprints at Equinix.
Under the terms of the agreement, GIC will own an 80% equity interest in the joint venture and Equinix will own the remaining 20% equity interest.
The joint venture is expected to close in the second half of 2020, pending regulatory approval and other closing conditions.
“Hybrid and multi-cloud have emerged as the clear IT architecture of choice, and Equinix is continuing its efforts to satisfy both the interconnection and core workload needs of the top hyperscale and cloud companies powering this infrastructure,” said Charles Meyers, President and CEO, Equinix.
“Following our successful partnership with GIC on the initial xScale data centre joint venture in Europe announced last year, we are now continuing our partnership with the formation of a new joint venture in Japan.
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“The new facilities under this JV will allow our hyperscale customers to streamline their continued growth, while strengthening Equinix’s leadership position in the cloud ecosystem.”
Upon closing of this joint venture, GIC is expected to have contributed cash to fund its 80% equity interest in the joint venture.
Equinix will have transferred its Tokyo TY12 and Osaka OS2 development assets, along with development rights and the land for an additional data centre in Tokyo, to the joint venture in return for a 20% equity interest in the joint venture and net cash proceeds in excess of $100 million.
Financing for the joint venture is also expected to close in the second half of 2020 and is anticipated to consist of a delayed draw term loan facility and a revolving credit facility.
“Japan is a strategic country for regional hyperscale expansion, and the demand for data centre capacity in the Tokyo and Osaka markets has outstripped supply,” said Jabez Tan, Head of Research, Structure Research.
“Through this new joint venture, Equinix and GIC will be a top provider of new data centre capacity for the world’s largest hyperscale companies seeking to expand in these two strategic markets – leveraging Equinix for both their core workload and interconnection requirements.
“This expansion aims to accelerate the adoption of hybrid and multi-cloud architectures by companies throughout the region.”
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