Slide 23 of this presentation contains a series of PIE graphs, the last, on asset values, showing that fully 31% (Canberra Data Centres, or CDC) and 25% (OneNZ), a total of 56% of all assets held now are held under the broad-brush label of 'telecommunications'. Who would have thought that Infratil is mostly a Telco now? Certainly not me!
I am not an Infratil shareholder. But I am now forced to take an interest, due to the other telecommunications assets that I do hold (principally Spark and Telstra).
I observe that Telstra are up front with co-operative efforts with the big US players, Amazon Web Services
https://www.telstra.com.au/business-...ons/amazon-aws
And Microsoft Azure
https://www.telstra.com.au/business-...icrosoft-azure
However, there is no information on now Telstra intends to buddy up with Infratil 48% owned CDC. So I have to ask, is Infratil via CDC, really in the strong position that they say they are in?
Next I look at Slide 24 in the presentation. This shows existing data centres targetting an 8-10% return per annum. Data centres under construction targetting a return of 10-15% per annum, with those on the drawing board looking to achieve a return of 15-25% per annum. Why are CDC so confident that their returns will increase with the hyperscale data centres from AWS and Microsoft Azure coming into the picture?
Slide 27 shows rack utilisation rates of 75%, 66% and 83%. However, the footnote says that these numbers include 'white space' and 'reserved'. Apparently, the meaning of 'white space', a term I am not familiar with, is:
"White space in a data center refers to the main operational area where key computing hardware, including servers, storage systems, and networking devices, is housed. This area is considered the data center’s usable space, primarily occupied by IT equipment arranged in hot and cold aisles. Data center white space is usually measured in square feet or square meters."
So, it looks like by including 'white space', CDC is including space where data storage equipment 'could be put', without any commitment from customers for data centre equipment to actually be installed there. By doing this, and including reserved space where customers are committed of utilising data centre space, which is not up and running yet, it looks to me like CDC are grossly exaggerating the real utilisation percentage capacity of their data centres.
I guess 'build it and they will come' 'at ever increasing return rates' is an investment strategy. But this CDC growth plan is giving me a high reading on my BSometer.
SNOOPY