Leaders at NVIDIA and Dell have been vocal on their expectations that artificial intelligence is going to drive excessive demand for data centres, commentary that asset manager Centuria Capital Group (ASX: CNI) has heeded by investing up to $21 million in ResetData, a pioneer in liquid immersion cooled data centres.
This strategic move marks Centuria’s entry into a rapidly growing sector, leveraging advanced technology to offer sustainable, high-density data storage solutions.
The investment in ResetData, which includes an upfront payment of $6.25 million, $10 million allocated for working capital, and an additional $4.75 million contingent on performance milestones, aligns with Centuria’s vision of expanding its revenue streams with existing investments primarily within the real estate industry. This new business line not only presents substantial revenue growth potential but also enhances Centuria’s existing real estate portfolio by transforming underutilised spaces into valuable assets. According to data provided by Centuria, Australia cannot deliver data centres fast enough to meet future demands.
ResetData’s data centres utilise Liquid Immersion Cooling (LIC) technology, which offers several advantages over traditional air-cooled systems. LIC data centres occupy a smaller footprint, consume less energy, and have a significantly reduced carbon footprint. These centres can be housed within existing office buildings, thereby reducing latency and enhancing connectivity for users. This is a stark contrast to conventional data centres, which often require large, warehouse-style facilities.
Centuria’s co-CEO, Jason Huljich, highlighted the strategic benefits of this investment, noting its potential to unlock value within Centuria’s office portfolio by establishing a network of edge data centres.
“The acquisition enhances rental streams and property valuations for our property funds, in addition to providing our tenants with access to local cloud storage with enhanced ESG credentials,” said Huljich.
Tying into Centuria’s real estate investment portfolio, these centres can provide cloud storage services to tenants and surrounding businesses, thus boosting rental streams and property valuations.
The LIC technology employed by ResetData offers impressive capabilities. A single 2.4 square metre LIC pod can produce 140kW, enabling a 100 square metre office space to house up to 1.5MW of capacity. In comparison, a traditional data centre of the same capacity would require approximately 1,000 square metres. This efficiency translates to a 31% reduction in carbon costs per week and zero wastewater generation, compared to the significant water usage in air-cooled systems.
John McBain, Centuria’s other co-CEO, emphasised the early mover advantage this investment provides. “We view our early investment in ResetData as presenting an early mover opportunity in a rapidly growing sector, providing new revenue growth and a point of difference for Centuria’s real estate platform,” said McBain.
He further drew parallels to Centuria’s strategic investment in real estate private credit in 2021, highlighting the Company’s ability to identify and capitalise on emerging market opportunities.
ResetData has already secured a 10-year lease at Centuria-managed 818 Bourke Street, Docklands, VIC, which will be transformed into one of Australia’s first AI inferencing and ultra-high density LIC data centres. This transformation is expected to increase the property’s valuation by 10-15% net of costs.
Centuria’s investment is timely, as the demand for data storage and processing is surging, driven by the exponential growth of AI and cloud services. The global cloud service market is projected to exceed USD $2.2 trillion by 2032, with Australian cloud services expected to reach AUD $23.2 billion in 2024.
As of 30 June 2024, Centuria Capital had $21.1 billion in assets under management.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, bloodstock enthusiast and former Analyst.
Latest posts by Alfred Chan (see all)
- ARC Funds acquires 30% of auzbiz Capital as latest direct-to-investor marketing venture - October 8, 2024
- Apiam appoints Bruce Dixon as Director, strengthening leadership with Greencross expertise - October 7, 2024
- IG data reveals fresh investor confidence following inflation-induced market lull - October 4, 2024
Leave a Comment
You must be logged in to post a comment.