NextDC Pays $124m for Horsley Park Site

Data centre player NextDC has snapped up another site in western Sydney as the Covid-19 pandemic ratchets up demand for information storage.

The data centre provider acquired the 12.4ha site in Horsley Park for $124 million from building products maker CSR.

To date, CSR has sold 52ha of land at its soon-to-close brick quarry in Horsley Park for more than $400 million.

The sale of land at Horsley Park comes as CSR optimises the operational footprint of its PGH Brick network, which includes five operating plants in NSW with more than 440ha of land in western Sydney.

CBRE’s Cameron Grier and Jason Edge negotiated the sale, which looks certain to re-set land pricing for western Sydney.

NextDC’s planned facility at Horsely Park will neighbour a major electricity substation, telecommunications, utilities and public infrastructure.

In addition, the proposed 300MW facility will serve enterprise and government customers and will also house “mission critical” operation centres, administrative offices and collaboration spaces.

NextDC managing director Craig Scroggie said the centre, if realised, would target a new Sydney market not currently connected to NextDC’s S1, S2 and coming S3 data centres.

The new data centre, S4, will be about 42km west of the Sydney CBD and is set to target a Sydney market not currently treated by NextDC’s S1, S2 and upcoming S3 data centres.

“The demand for premium quality data centre assets in digital gateway regions such as Sydney continues to reflect the growth trajectory of technology infrastructure over the next decade,” Scroggie said.

“NextDC looks forward to being able to offer its customers dual availability zone solutions across its existing S1 and S2 Macquarie Park and S3 Gore Hill metropolitan data centres as well as this new S4 hyperscale campus in western Sydney.”

Scroggie said the data centre provider would progressively settle on the land parcels at the S4 site as they are made ready for development, which is expected to take place between the second half of the financial year 2024 and the first half of the financial year 2025.

The plans for a new data centre site in Sydney follow the data centre operator opening its second Perth facility a year ago.

Data centre investment worldwide has surged during the pandemic, which has served to highlight a long-coming shift to an online life that requires data for everything from streaming services to buying groceries.

According to Tom Glover, head of data centre transactions for EMEA at JLL, heated competition in more established markets is pushing data centre and industrial investors to look further afield.

“Land for development in and around major locations carry a premium and finding opportunities is a challenge,” Glover said.

“As major consumers of data centres look to expand, it’s inevitable that underdeveloped markets will come more into focus in the coming years.

“The challenge for the investor is anticipating where these markets are.”