Centuria Capital to acquire 50% of ResetData for $21 million

Centuria Capital Group is set to acquire a 50% interest in the data centre provider ResetData for up to USD $21 million. The transaction aims to expand Centuria's revenue stream into cloud-based data services, an area seen as having substantial growth potential.

This acquisition positions Centuria at the forefront of the Liquid Immersion Cooled (LIC) data centre technology sector. Liquid Immersion Cooling enables higher efficiency by offering a smaller footprint and lower energy consumption compared to traditional air-cooled data centres. Consequently, this technology allows data centres to be housed within existing office buildings, reducing connectivity latency for end-users.

Jason Huljich, Joint CEO of Centuria, emphasised the potential of LIC technology, stating, "We are looking to build AI factories of tomorrow with the LIC technology enabling deployment of cloud-based technologies in less space, requiring fewer resources and with a significantly reduced carbon footprint." He added that these data centres generate higher rental returns per square metre compared to traditional office tenants.

ResetData has entered a 10-year lease agreement for up to 1.5 MW of capacity at Centuria's 818 Bourke Street property in Docklands. This Melbourne site will be transformed into one of Australia's first AI inferencing and ultra high-density LIC data centres, a move expected to increase the property's valuation by 10-15% net of costs.

John McBain, also Joint CEO of Centuria, remarked on the early mover advantage this investment provides. "Centuria's corporate acquisition strategy seeks real estate market opportunities that provide strong tailwinds and limited competition," McBain commented. This strategy is aligned with Centuria's previous ventures, such as their 2021 investment in real estate private credit with Centuria Bass Credit.

Centuria's strategic investment seeks to leverage the predicted growth in data storage and artificial intelligence. The global cloud service market is anticipated to exceed USD $2.2 trillion by 2032, growing at a CAGR of 17.1%, while Australian cloud services are expected to surpass AUD $23.2 billion in 2024, reflecting a 19.3% increase compared to 2023.

The partnership with ResetData is underpinned by existing collaborations with companies like Dell, Nvidia, Submer, and Unicom Engineering. These relationships enable ResetData to offer Original Equipment Manufacturer (OEM) capabilities for liquid immersion cooling technology.

Bass Salah and Marcel Zalloua, Joint CEOs of ResetData, expressed their enthusiasm for the partnership with Centuria. They noted, "This is an exciting opportunity to partner with a leading USD $21 billion Australasian real estate funds manager, which provides the means to scale our new generation data centre offering throughout Australia and New Zealand, beginning with 818 Bourke Street in Melbourne."

The LIC technology used by ResetData claims to offer significant environmental benefits, including zero water waste compared to approximately 13,000 gigalitres used annually by traditional air-cooling systems, and a 31% reduction in carbon costs.

Centuria's investment in ResetData will be funded through the company's existing debt capacity. It is projected to be earnings neutral in the financial year 2025 and accretive to operating earnings per share (OEPS) from the financial year 2026 onwards.

This strategic move by Centuria not only looks to capture emerging growth opportunities but also aims to enhance rental yields and property valuations across their real estate portfolio, benefiting both their property funds and tenants by providing local cloud storage solutions.