NXT & AJD - NEXTDC & Asia Pacific Data

[Snoopy]

From the road show presentation for the April 2024 capital raising:
https://www.listcorp.com/asx/nxt/nex...n-3017856.html

There is a lot of speculation attached to the datacentre market, especially about the future. 'Construction cost' is one aspect of datacentres we can feel more confident about, because those numbers are 'in the past'. Yet even then, datacentre providers can be coy about exactly how much money they have spent on various projects. In the interest of transparency, I think it is worthwhile recording in one place (i.e. here) from Australasian sources exactly what we do know 'for sure' about the cost of building a datacentre.





From the Spark Thread (NZX forum)

Post 2257 https://www.sharetrader.co.nz/showth...=1#post1058688
2.3MW datacentre opened in 2014 in Takanini, Auckland, - cost $NZ60m, or ($NZ60m/2.3MW=)$NZ26.1m/MW.





From the Infratil Thread (NZX forum)

Post 3602 https://www.sharetrader.co.nz/showth...=1#post1057693
In 2022, Canberra Data Centres (CDC) opened two 14MW datacentres in Auckland (in Hobsonville and Silverdale), for a total capacity of 28MW and costing 'more than $NZ300m', or 'more than' ($NZ300m/28MW=) 'more than' $NZ10.7/MW

Post 3750 https://www.sharetrader.co.nz/showth...=1#post1059976.
Future datacentre roll outs are being completed over three years.

Post 3753 https://www.sharetrader.co.nz/showth...=1#post1060160
Land value of datacentres is typically less than 10% of the balance sheet book value.





From the NextDC April 2024 Road Show presentation (link in referred text above)

Slide 17 'S4 Sydney'. Building works incorporating 10MW built capacity and critical high voltage infrastructure, $A350m, or ($A350m/$10MW=)$A35m/MW

Slide 17 'S3 Sydney'
https://www.datacenterdynamics.com/e...9-uncertainty/

had an original build cost of $A350m (back in 2020) with an initial capacity of 12MW. 'with a total capacity of 80MW expected by the first half of 2022.' That 'first half of 2022' target was not met, as the green light to expand capacity to 50MW was only given in April 2024. Prior to this built capacity was 13.5MW
https://www.datacenterdynamics.com/e...ter-in-sydney/

The $A400m of S3 'accelerated build capacity' will provide incremental capacity of (50MW-13.5MW=)36.5MW. This equates to ($A400m/36.5MW=)$A11.0m/MW

Slide 17 'M2 Melbourne'. Extending the base building and capacity to 60MW. Some history of 'M2 Melbourne' is here:
https://www.datacenterdynamics.com/e...ane-melbourne/

Land to build two datacentres in Melbourne (M2, initial capacity 6MW) and Brisbane (B2, initial capacity 1.5MW) was acquired in 2016, at a combined project build cost of $A160m. With costs allocated in proportion to capacity, I get the initial build cost of M2 to be ( 6/7.5 x $A160m =)$128m. This equates to ( $A128m/6MW=)$A21.3m/MW

This article:
https://www.afr.com/technology/why-n...0200513-p54sh1

suggests M2 was a 'problem child', with only 4MW of capacity being used until 2020, after which customers signed up to another 33MW of new contract options. Now 33MW+4MW=37MW. Three years on is enough construction time to install equipment to fulfill those contracts, plus a bit more. (Edit: This may be correct. But actual capacity built at the April 2024 capital raising time, slide 27 of the presentation, was only 28MW. So there is 32MW to go to reach M2 site capacity of 60MW). The cost of finishing M2 is said to be $A330m. This equates to ($A330m/32MW=)$A10.3m/MW.

The afr article concludes with a description of the business activities of NEXTDC, which provides some clarity on the NEXTDC business model:
"NEXTDC builds hybrid data centres, which cater to both the retail and wholesale customers. Retail data centre deployments tend to be smaller contracts, which rely on the data centre providing additional services like connectivity to cloud providers and on-site staff. Wholesale contracts are those where businesses with large footprints, like banks, rent the space and power but provide their own services."

In case you are wondering how NextDC fits in with the big multinational data centre players, Google Cloud, Microsoft Azure, AWS, Oracle Cloud and IBM Cloud are all customers of NextDC.

From the April 2024 presentation slide 21
"In Australia, cloud service providers have preferred to outsource their IT infrastructure needs to third-party providers such as NEXTDC, as it is typically more cost-effective, and they are able to rely on NEXTDC’s dedicated expertise and resources for data centre development and services."

SNOOPY

[Snoopy]

First observation: The two costings we have for the smaller older datacentre facilities (Spark's Takanini, 2014) and the initial stage of Melbourne M2 (NextDC, 2020) are noticeably higher than present day costs on a 'dollar per Megawatt' basis. I am not surprised by this. Spark Takanini's building works I know were constructed with further 'computer power inside expansion' in mind. IOW there was some 'future proofing' in the initial Takanini build. This may have been true for NextDC's Melbourne M2 site as well. NextDC Melbourne M2 was designed to have more than one story of datacentre based on a single site footprint. This was pioneering design for NextDC, and the kind of architecture that will be required, as NextDC resurrect their plans to build datacentres in Asia (Kuala Lumpur in Malaysia is already in development) . The ground floor of a civil structure for a multistory building has to be more robust (read expensive to build) than if the building were a straight single story design plan. So it is only natural that the occupiers of the first stage of such a complex have a more expensive structure over which to spread their working computer cost overheads.

Also expensive on a dollar per Megawatt basis was NextDC's S4 Sydney site. But it was made clear that part of the reason for that was the electrical wiring work needed to bring sufficient electrical power to the building site to allow the fully finished development, some years down the track, to operate. It is important to set up a site with sufficient power operating capacity for foreseeable future needs. The was brought home with NextDC's Melbourne M2 site, where the finishing cost per Megawatt of the completed data centre was only around half the establishment cost.

The three more recent developments:
1/ CDC in Auckland New Zealand (cost $NZ10.7m + /MW)
2/ NextDC Sydney S3 (last stage cost forecast $A11.0m/MW)
3/ NextDC Melbourne M2 (last stage cost forecast $A10.3m/MW)

are quite close in development cost on a dollar per Megawatt basis. Melbourne M2 I would suggest is the more efficient build, simply because of the smaller footprint made possible by building one data centre on top of another.

SNOOPY