'A $20 billion opportunity': HMC Capital's ambitious data centre punt
Airtrunk was sold for $24 billion. HMC Capital's David Di Pilla thinks he can put similar numbers on the board.
Airtrunk’s sale to Blackstone was among the biggest M&A deals of the year. If David Di Pilla gets his way, data centres will also be at the core of the biggest ASX float of 2024.
His HMC Capital on Thursday announced it would splash $1.93 billion on Global Switch Australia, which owns two data centres in Sydney near Darling Harbour. Between them the facilities have a capacity of 26 megawatts, a significant amount that HMC plans to expand over 300% times over to 88 megawatts.
While artificial intelligence pervades the market narrative around data centres, this particular acquisition has little to do with the trendy tech. It is unusual to have data centres of that capacity on the fringe of a central business district. Hosting servers so close to a nearby office will dramatically reduce lag, and HMC Capital is betting banks, telcos and others will pay a premium for that benefit.
Global Switch Australia’s current owners have been unable to truly take advantage of the prime real estate. Since 2018 Chinese steelmaker Jiangsu Shagang has owned a controlling stake in Global Switch, which also operates data centres in Europe. That sparked legislation banning government agencies from hosting data in Global Switch Australia’s facilities — around the same time Huawei was banned from building telco infrastructure — which Di Pilla contends made attracting fresh clientele difficult.
