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Data centre demand sees NextDC raising AU$120m for two new data centres
Thu, 26th Nov 2015
FYI, this story is more than a year old

NextDC is entering another capital raising round this time seeking AU$120 million, as it gears up to build two new data center facilities in Brisbane and Melbourne.

The company says it is continuing to experience strong demand for its premium data center services and its existing Brisbane  (B1) and Melbourne (M1) facilities are rapidly reaching capacity contstraints. B1 hit 90% capacity at the end of October – up from 79% at the end of June – while M1 contract utilisation reached 77%, up from 76%.

NextDC says it also has advanced discussions in relation to further large customer opportunities across its existing data center footprint.

Craig Scroggie, NextDC chief executive officer, says both B1 and M1 have proven to be ‘highly successful facilities' in a relatively short period of time.

“We are confident that the ongoing demand in these geographies, together with our return expectations, warrants this next phase of investment in markets we know well,” Scroggie says.

The company is seeking a further AU$120 million for the new facilities, which it estimates will have an initial investment outlay of AU$175 million to $200 million in the first 12 to 18 months.

The funding comes on top of $100 million raised in an early Notes II offer, with the company saying the capital raising, combined with the Notes II offer proceeds and current cash reserves, undrawn secured debt facility and ongoing operating cashflow is expected to provide adequate funds to complete the new investment and fund capital requirements of the potential new customer opportunities in advanced discussions.

The new B2 centre in Brisbane is expected to have an initial cpacity of 2MW+ with a target total capacity of approximately 25MW.

NextDC says it is currently considering a number of new sites for each of the facilities and expects to commission the new data centers in the second half of FY17. The company plans to buy the properties on which the data centers will be located, ensuring greater control over the assets.

Scroggie says NextDC is on track to achieve its financial guidance of $85 million to $90 million revenue and EBITDA of $25 million to $28 million.