As the Nordic data centre market is expected to get €3.3billion in investment by the end of 2017, Norwegian colo player DigiPlex has issued a NKr 575 million bond to finance further regional expansion.
The company, majority owned by Carlyle Group co-founder, Bill Conway, said it took advantage of low interest rates when tapping into the public bond market for the second time in the last year.
DigiPlex said the expansion was needed as local demand rates are growing. However, the issue of publicly traded bonds to build data centres is something the industry does not see often, with DigiPlex the only company to use bonds to finance data centre expansion.
It said in a statement: "The funds raised shall be used to fund further expansion as demand for DigiPlex data centres in the region remains robust."
The floating rate note with a four-year tenor 2015/19 has been placed with blue-chip financial institutions and pension funds, and will be listed on the Oslo Stock Exchange (Oslo Børs).
Gisle Eckhoff, CEO at DigiPlex, told CBR: "This was a successful placement with favourable conditions for our company. We will continue to fulfil the market’s demands through differentiated and innovative energy-efficient services, strong financial performance and securing growth in the data centre market throughout the Nordic region."
Byrne Murphy, chairman of DigiPlex, also said that the company is making the most of today’s "remarkably low interest rates".
He said: "We have chosen a floating-rate note because we believe that interest rates in the region will remain low for years to come, and may yet drop lower. We are happy to put our money where our mouth is in this respect. For a growing business, this second bond by DigiPlex is a prudent move."
The £46.1 million bond (NKr 1 = £.08 as of February 4), follows DigiPlex’s issue in 2014 of a NKr 500 million (£40.1 million) bond to fund the construction phase of its technologically advanced and environmentally friendly Fetsund data centre in Oslo, Norway (pictured above).
The company opened the latest expansion of the data centre in April 2015 and claimed it to be the first and only in the world to have had its construction financed by the issue of publicly traded bonds.
The hub was opened by Norway’s Minister for Climate and Environment, Tine Sundtoft. It has a PUE ratio of 1.1 due to the use of the naturally cool Nordic climate to reduce energy consumption by about 25%. All energy is produced by renewable sources.
The data centre, which is set for more expansion in the future, has 18MW of power and 20,000 servers across two three story buildings with 2,100 sqm of net space each.
Speaking to CBR, Steve Wallage, MD at Broadgroup, said: "BroadGroup is seeing very strong appetite for DC assets. Digiplex first bond was well supported with a blue-chip client (EVRY) and long-term leases (20 years).
"With its second bond, it will have been that bit easier having gone through much of the education progress with the first. It can also point to blue-chip clients such as Nasdaq in Sweden, and the strong long-term operational record of Digiplex."
The Nordic data centre region, which today counts 122 colo hubs deployed in Iceland, Norway, Sweden, Finland and Denmark, has seen since 2011 an uptake in investment. The first big name to move in was Facebook with a 290,000 sq ft site in Luleå, Sweden.
According to BroadGroup, the region is set to benefit from significant data centre investment, with an estimated €3.3bn coming into the region over the next three years.
Wallage said that attractions to this market are obvious, such as the cooling savings, but also being strengthened such as new telco cables and government incentives.