A joint venture between Equinix and PGIM Real Estate, the real estate investment and financing arm of PGIM, the global asset management business of Prudential Financial, has been announced. The purpose of this venture is to develop and operate the first xScale data center in the United States, which will be situated in the Silicon Valley region of California. The undertaking is estimated to cost $600 million.
The two-story data center, which will be referred to as SV12x, will be constructed in two stages, and it is anticipated that it will have a power capacity of more than 28 megawatts (MW) when it is completely constructed.
The SV12x data center is situated on the Great Oaks data center site in San Jose, California, which is also home to four other Equinix International Business Exchange (IBX) data centers that are already in operation. It is anticipated that the first phase of the facility would be finished in the second quarter of 2024.
The structure of the agreement assigns PGIM Real Estate an 80% equity interest in the joint venture, while Equinix retains a 20% stake. This arrangement would underscore PGIM Real Estate's confidence and commitment to the data center sector, a field they have been investing in since 2013.
725MW Data Center Capacity
This collaboration between Equinix and PGIM Real Estate marks their second joint venture, following a successful initial partnership. This new venture is a significant expansion of Equinix's global reach in the hyperscale data center market. It would enhance their already substantial xScale data center portfolio, which, with this addition, is expected to exceed $8 billion in value, encompassing more than 35 facilities worldwide. These facilities are projected to have a combined power capacity of over 725 megawatts upon completion.
Equinix's xScale data centers are strategically designed to support hyperscale companies. They would enable these companies to integrate core deployments with their existing networks within Equinix's International Business Exchange (IBX) data centers. This integration facilitates growth on a unified platform that spans over 70 metropolitan areas globally, providing direct interconnections to a dynamic ecosystem of more than 10,000 customers.
With a total of $210 billion in gross assets under management and administration, PGIM Real Estate gives investors and borrowers access to a wide variety of real estate equity, real estate debt, agribusiness, and impact solutions that span the whole spectrum of risk and return.
This new joint venture is the first investment executed under PGIM Real Estate’s newly dedicated global data center strategy. This strategy is managed on behalf of third-party clients and focuses exclusively on investing in hyperscale data center facilities located in key internet gateway markets across the U.S., Europe, and Asia-Pacific. This strategic move would align with the growing demand for data processing and storage solutions globally, signifying a robust growth trajectory in the digital infrastructure domain.
