PGIM Real Estate, Equinix Enter $600M JV

The companies will build the first data center of its kind in the U.S.

The Equinix SV12x International Business Exchange™ in San Jose, Calif. Image courtesy of Equinix Inc.

PGIM Real Estate and Equinix Inc. have entered a $600 million joint venture for the development and operation of SV12x, a San Jose, Calif., data center. Upon completion, the facility will be the first xScale data center in the nation.

The two-story asset will be built in two phases. SV12x is anticipated to provide more than 28 megawatts of power capacity once completed.

Situated in the Equinix Great Oaks data center campus, the facility will be developed alongside four already operational Equinix data centers.

READ ALSO: How AI is Boosting the Data Center Market

Downtown San Jose is approximately 11 miles from the up-and-coming facility. The San Jose Mineta International Airport is within some 15 miles.

Phase one of SV12x is scheduled for completion in the second quarter of this year. PGIM Real Estate will own an 80 percent equity interest in the joint venture, while Equinix will control the remaining 20 percent.

A larger demand for data centers

Upon delivery the new xScale project will bring Equinix’s global xScale data center portfolio to more than $8 billion and 725 megawatts of power.

This project marks the second joint venture that Equinix and PGIM Real Estate have embarked on together. With a total commitment of $575 million, the first joint venture was formed in 2021, for the development of two xScale data centers in Sydney, Australia. In 2022, the first building, Sy9x, was completed.

As artificial intelligence explodes, demand for data centers is seeing a significant increase. As such, data center REIT equities have been witnessing an extremely strong performance. Those with global operating scale, such as Equinix, are especially poised to benefit from strong secular growth.

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