Global Switch Australia Back to Local Ownership in $1.94 Billion Agreement
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Global Switch Australia Reverts to Local Ownership in $1.94 Billion Transaction
Global Switch Australia is preparing to transition back to local ownership as it is acquired by Australian asset manager HMC Capital for approximately $1.94 billion. This deal signifies an important transition in the control of essential digital infrastructure in Australia, especially in light of heightened concerns regarding data sovereignty and security.
Quick Overview
- Global Switch Australia is being taken over by HMC Capital for $1.94 billion.
- The deal encompasses two data centres located in Sydney, which will be integrated into a new digital infrastructure platform.
- The data centres currently boast a capacity of 26MW, with potential enhancements allowing growth up to 88MW through optimisation initiatives.
- HMC plans to bring the digital infrastructure platform to the ASX via a real estate investment trust (REIT).
- Global Switch has experienced persistent issues due to its foreign ownership, particularly from governmental clients like Defence.
- The acquisition will localise Global Switch’s ownership, alleviating these concerns while paving the way for better expansion and update efforts.
A Significant Change in Australia’s Digital Framework
The acquisition of Global Switch Australia by HMC Capital transcends mere financial implications; it marks a pivotal change in the ownership of vital digital infrastructure within the nation. The twin data centres situated near Sydney’s CBD are poised to serve as foundational assets within an overarching digital infrastructure platform. This platform will be managed by a real estate investment trust (REIT) and be listed on the Australian Securities Exchange (ASX), facilitating public investment in this vital infrastructure.
Presently, Global Switch operates at around 26MW capacity, yet HMC Capital has proactively detailed intentions for a “densification and optimisation” project. This endeavor could elevate capacity to 88MW, essentially tripling the data centres’ capability to accommodate growing demand from high-performance computing and AI applications.
Significance of Local Ownership
Having been under foreign control for a significant duration, Global Switch has faced challenges, particularly from its governmental clients. For instance, the Australian Defence Department has contemplated exiting the facility for years due to worries surrounding data sovereignty and security. Other governmental bodies, such as Home Affairs and ASIC, have already initiated steps to vacate Global Switch’s data centres.
This acquisition by HMC Capital is anticipated to mitigate these issues. With Global Switch transitioning to a fully Australian-owned entity, it will be better positioned to fulfil the rigorous demands of various Australian governmental departments, particularly concerning privacy, sovereignty, and security.
Enhancing Capacity and Modernising Infrastructure
Global Switch Australia’s CEO, Damon Reid, has praised the acquisition as a new phase for the company. He underscored the committed investment into modernising the existing infrastructure, centering on enhanced power densities and improved energy and water efficiencies. The planned enhancements are critical as the company strives to accommodate the surging demand for high-performance computing and artificial intelligence (AI) inference workloads.
These anticipated upgrades aim to elevate the company’s IT capacity to approximately 100MW, establishing the Sydney campus as a significant contender in the Australian data centre industry. Moreover, HMC Capital is reportedly considering hyperscale assets in North America to incorporate into the REIT, thereby expanding the company’s international presence.
Alignment with Hosting Certification Framework
A primary focus for the newly Australian-owned Global Switch will be to collaborate closely with the government to secure accreditation through the Hosting Certification Framework. This framework assists Australian governmental departments and agencies in identifying hosting services that satisfy heightened privacy, sovereignty, and security criteria. Attaining certification will be pivotal for Global Switch to retain and attract governmental clients in the years to come.
Conclusion
Global Switch Australia is moving towards local ownership, with HMC Capital taking over for $1.94 billion. This acquisition responds to longstanding issues relating to foreign ownership, specifically from governmental tenants like Defence. The deal includes two data centres in Sydney, which may see capacity rise from 26MW to 88MW through future enhancements. HMC Capital intends to list the data centre assets on the ASX via a real estate investment trust (REIT). The acquisition also encompasses plans for upgrades to support high-performance computing and AI workloads. Additionally, Global Switch will aim to secure government accreditation under the Hosting Certification Framework, further aligning its operations with Australian sovereignty and security needs.
Q: What makes the acquisition of Global Switch Australia important?
A:
The acquisition by HMC Capital is important as it reestablishes critical digital infrastructure under Australian control, addressing ongoing issues related to foreign ownership, particularly in areas handling sensitive government information. This change also lays the groundwork for future growth and modernization of the data centres.
Q: What assets are central to this deal?
A:
The major assets involved are two data centres situated close to Sydney’s CBD. These centres will function as foundational assets for a new digital infrastructure platform that will be listed on the ASX through a real estate investment trust (REIT).
Q: What impact will the acquisition have on Global Switch’s data capacity?
A:
The data centres currently have a capacity of 26MW, but HMC Capital aims to boost this to 88MW via a densification and optimisation initiative. Additional upgrades will expand the total IT capacity to around 100MW to satisfy rising demand for high-performance computing and AI workloads.
Q: What is the Hosting Certification Framework, and why is it significant?
A:
The Hosting Certification Framework is utilized by Australian governmental departments and agencies to identify hosting services that comply with strict privacy, sovereignty, and security standards. Attaining certification under this framework will be vital for Global Switch to keep serving government clients.
Q: How does this acquisition influence governmental clients like Defence?
A:
The acquisition greatly alleviates concerns surrounding foreign ownership for government clients like the Defence Department. With Global Switch now being locally owned, these clients are more inclined to maintain or renew contracts, as the new ownership structure is expected to align more closely with Australian data sovereignty and security requirements.
Q: What are the prospective plans for Global Switch under HMC Capital?
A:
HMC Capital intends to enhance and increase the capacity of the data centres, prioritizing power density, energy efficiency, and water efficiency improvements. Additionally, the company is exploring the acquisition of hyperscale assets in North America to further enrich its digital infrastructure portfolio.