Global infrastructure investor Macquarie continues to invest heavily in the data center sector. Its latest initiative is a strategic partnership with Prime Data Centers, a California developer with projects in Sacramento and Santa Clara and more in the pipeline.
Macquarie Capital, the investment arm of Macquarie, will make an equity investment in Prime and commit significant capital to its future growth, potentially making Prime a much larger player in data center development. The partnership has targeted capital investments in excess of $5 billion over the next 10 years.
The partnership is the latest example of how investor interest in digital infrastructure is driving rapid growth for the data center industry. This trend is creating opportunities for teams like Prime, a relatively new player that has built a ” robust pipeline of data center projects throughout the Americas and Europe,” according to Macquarie.
“Data centers are a critical component of the digital infrastructure system and innovative developers such as Prime are positioned to deliver flexible, strategic solutions that data-reliant companies need more than ever,” said Mark Bradshaw, Head of Infrastructure Investing and Development for Europe & Americas at Macquarie Capital. “With this partnership and investment, Macquarie Capital can leverage its green energy platform, financial capabilities and its global digital infrastructure experience to help Prime Data Centers accelerate the development of a promising project pipeline of 400MW and drive long-term growth.”
Macquarie Infrastructure Partners has been an active acquirer in the U.S. data center market, and is the majority owner of Aligned, Netrality and Bluebird Networks, supporting significant expansions of their operations.
Prime Sees ‘Potential Paradigm Shift’
Prime is a privately-held developer based in Sacramento, where it is developing a campus at McClellan Park with room for up to six data center buildings. The company recently announced an 8 megawatt build-to-suit lease with a publicly-traded global enterprise.
The Sacramento project is one of several California developments for Prime Data Centers, which was founded in 2019 and offers customers flexible ownership and leasing models for their projects, with options including sale-leasebacks or greenfield developments. The company also owns a fully-leased data center in Hayward, Calif. and is developing a 9 megawatt data center in Santa Clara in Silicon Valley.
Macquarie Capital will bring its infrastructure investing and development franchise to the partnership. Prime CEO and Founder Nicholas Laag said the investment provides his team with the ability to be a long-term player in digital infrastructure.
“Macquarie Capital is an excellent fit for us, not only because of the strategic nature that is truly unique and a potential paradigm shift in solving for the delivery of sustainable mission-critical infrastructure on demand at whatever capacity, but also because of their long-term investment horizon to really scale and leverage our mutual assets and people,” said Laag. “We are planning for 10 and 20 years and not only one, three or five years, which we believe will align well with customers.”
Macquarie Capital’s Infrastructure Investment and Development team focuses on asset creation and stabilization opportunities within the digital infrastructure ecosystem, including towers, data centers, fiber, small cells and other related digital infrastructure assets. This team invests balance sheet capital to sponsor, develop and grow landmark projects that create new digital, transport and social infrastructure.
Macquarie Capital currently has over $25 billion of infrastructure projects under construction or development and is an industry leader across transportation, social, communications, renewable energy, and conventional energy infrastructure.