Blackstone Real Estate Partners, Blackstone Infrastructure Partners, Blackstone Tactical Opportunities, and Blackstone’s private equity strategy for individual investors, along with the Canada Pension Plan Investment Board (CPP Investments), have agreed to acquire 100% of AirTrunk, an Asia Pacific (Apac) data center firm, in a deal worth around A$24 billion ($16 billion).
The amount includes debt and capital expenditure for committed projects.
The sellers are Macquarie Asset Management (MAM), Canada's Public Sector Pension Investment Board (PSP Investments) and other investors. A MAM consortium bought a 88% stake in AirTrunk in April 2020 for a valuation of around A$3 billion.
While a spokesperson for Blackstone told FinanceAsia it is not providing a breakdown of the equity percentages, CPP Investments said in a company statement that it would be acquiring 12% of AirTrunk. CPP Investments said it has data centre joint ventures and investments in Australia, Hong Kong, Japan, Korea, Malaysia and Singapore, in addition to the US.
The deal, if completed, would be Blackstone’s largest investment in Apac. The transaction is subject to approval from the Australian Foreign Investment Review Board.
AirTrunk, which was advised by Goldman Sachs on the deal, is the largest data centre platform in Apac, with a presence across Australia, Japan, Malaysia, Hong Kong, and Singapore. It has more than 800 megawatts (MW) of capacity committed to customers and owns land that can support over 1GW of future growth across the region, according to a statement from Blackstone. AirTrunk agreed a record sustainability-linked loan (SLL) of A$4.6 billion last year.
Jon Gray, president and chief operating officer of Blackstone, said: “AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centers, power and related services.”
Sean Klimczak, global head of Blackstone Infrastructure and Nadeem Meghji, global co-head of Blackstone Real Estate, said: “Digital infrastructure is experiencing unprecedented demand driven by the artifical intelligence (AI) revolution, as well as the broader digitisation of the economy."
They added: "Prior to AirTrunk, Blackstone’s portfolio consisted of $55 billion of data centres including facilities under construction, along with over $70 billion in prospective pipeline development. We look forward to partnering with the outstanding AirTrunk management team to further accelerate its growth.”
Robin Khuda, founder and chief executive officer of AirTrunk, said: “This transaction evidences the strength of the AirTrunk platform in a strong performing sector as we capture the next wave of growth from cloud services and AI and support the energy transition in Apac."
Khuda added: “We look forward to working with Blackstone and CPP Investments and benefitting from their scale capital, sector expertise and valuable network across the various local markets, which will help support the continued expansion of AirTrunk.”
In a statement from CPP Investments, Max Biagosch, senior managing director, global head of Real Assets and head of Europe for CPP Investments said: “This investment represents another milestone in our broader data centre strategy, further enhancing our footprint in the region to the benefit of CPP contributors and beneficiaries. It's also a great example of close collaboration across the fund, with our infrastructure and real estate teams working together seamlessly to underwrite this investment.”
It is expected that there will be approximately $1 trillion of capital expenditures in the US over the next five years to build and facilitate new data centres, with another $1 trillion of capital expenditures outside the US, according to a statement from Blackstone.
Blackstone has invested in both the debt and equity of other data centre companies, including QTS, Coreweave and Digital Realty.
Earlier this year in August, MAM, via Macquarie Korea Infrastructure Fund agreed to acquire the Hanam Data Centre located in the Greater Seoul Area of South Korea. The sale price was KRW734 billion ($530 million); however, including the transaction cost and additional capital required to complete the remaining mechanical, electrical and plumbing works at Hanam IDC, the total deal size was KRW918 billion.
