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Media - Australian Financial Review

TRE buys first of its data storage sites

Tina Perinotto
4th October 2007

Thakral-backed Technical Real Estate has bought the first site for its rollout of data centres to meet the huge demand for computer storage, at the Norwest business park in Sydney for $17.4 million.

In Canberra TRE is in partnership with utility ActewAGL to deliver a new gas-fired power station for Canberra and up to 30 data centres on the same site - a move that has the potential to position Canberra as one of biggest and most secure sites in the world in terms of power.

The $1.2 billion Canberra Technology City will be at Hume on a site secured for the consortium by the ACT government and at a second smaller site at Beconnen. At Norwest, the end value of the centre, on a 2.4 hectare site, is to be between $180 million and $200 million.

TRE director Stephen Ellis, former CBRE chief executive, said another site in Melbourne was close to being secured, with more to come in Brisbane and Perth.

He said raised floor space - the high-cost technical area in a data centre that hosts the computer racks - would be between 3000 and 5000 square metres at Norwest, while the first building in Canberra would be about 1000 sq m. The group is also planning a centre overseas at a five-hectare site in Jurong in Singapore that will have 9000 sq m of raised floor space.

Key to the launch of the consortium and its plans is involvement by UK-based Galileo Connect, a group of engineers and consultants that has developed cost-efficient, energy-efficient modules that can also be upgraded to handle evolving computer power demands.

Another TRE director, Bruce McEwen, said demand for computer storage was reaching mammoth proportions and that experts claimed that be 2010, "96 percent of all data centres will have exhausted their capacity".

"People didn't expect that the large computer manufactures like Sun and Dell would continue to deliver more and more dense computing (power) but along with that comes an incredible number of circuits on each centimetre of chip.

"And when you condense the number of circuits you consume more power, and when you consume more power you produce heat (that has to be cooled)."

Mr Ellis said existing data centres were being made redundant by the speed of technological developments. "A problem with existing building is that most are running at (capacity for) 800 watts a sq m but we roll ours out at 1500 watts per sq m and they are upgradeable to 3000 watts.

"It's not just the power but having everything else to accommodate that upgradeability."

The Galileo model incorporates a liquid CO2 cooling system that can reduce power consumption by 30 per cent.

Co-location with a power station will also reduce by up to 15 per cent the amount of energy lost when power is brought in from off-site.

This is where the partnership with a power station supplier becomes strategic, according to John MacKay, chief executive officer of ActewAGL, which brokered the deal with TRE.

According to Mr Mackay, Canberra looked for several years for a way to make a new power station financially viable.

"The light-bulb moment was with data centres." In the post-9/11 climate, he said, "all the banks and security companies are exponentially increasing their requirements and exponentially increasing their concerns about security in this area".

The gas-fired power station had several advantages, said Mr Mackay. It would enhance security of power supply for the capital; it would be much more environmentally friendly than coal power "imported" from NSW; and it would make sense because the proposed site, at Hume, was close to two independent gas pipelines from the north and from the east.

The leasing agent for the TRE, CB Richard Ellis Technology Practice Group senior manager Mark Jones, said inquiries for pre-leasing the site had been "flooding in", especially from local government departments in Canberra.

However, not everyone agrees that demand has overwhelmed supply. Managing director of hosting for Macquarie Telecom Aidan Tudehope agreed there was strong demand for data centre capacity. "That's a fact," he said. "As for running out of space - I wouldn't say we are running out. There is a good amount of supply out there."