Equinix today announced additional joint venture agreements with GIC, Singapore’s sovereign wealth fund, which when fully built-out will bring Equinix’s xScale data center portfolio to $6.9bn+, across 32 facilities globally, which will provide 600+ megawatts of power capacity. Notably, the joint venture is heavily-weighted towards expansion in Europe, with ~60% of the facilities being built-out in this region.

Incrementally, Equinix and GIC are increasing their joint venture program by $3.9bn, 23 hyperscale data centers, and 307+ megawatts of power capacity.

Finally, each of the joint venture projects will close in stages throughout the course of 2021.

xScale Data Center Portfolio – Equinix and GIC

Through their xScale joint venture, Equinix and GIC’s build-out of 32 facilities globally will be weighted, by number of data centers: Europe (59%), Asia-Pacific (19%), Americas (13%), and Unidentified (9%).

Equinix xScale Data Center Locations
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Equinix and GIC will build-out 19 xScale data centers across Europe. Notably, 11 of the total facilities being built will be located in the FLAP markets of Frankfurt, London, and Paris. The xScale data centers by market include Frankfurt (5), Paris (4), Dublin (3), London (2), Madrid (2), Helsinki (1), Milan (1), and Warsaw (1).


Equinix and GIC will build-out 6 xScale data centers in Asia-Pacific. The xScale data centers by market include Osaka (3) and Tokyo (3).


Equinix and GIC will build-out 4 xScale data centers in the Americas. The xScale data centers by market include São Paulo (3) and Mexico City (1).


Finally, Equinix and GIC will announce three additional xScale sites at a future date.

xScale Value Proposition for Hyperscale Companies

xScale, Equinix’s brand for hyperscale data centers, serves the core workload deployment needs of hyperscale companies, including large cloud service providers. These core workload deployments will add to the existing access point footprints of these hyperscale customers at Equinix. In turn, this architecture enables the hyperscale companies to offer direct interconnection, with Equinix’s ecosystem, to their own customers.

Overall, these cloud service providers include Amazon Web Services, Microsoft Azure, Google Cloud, IBM Cloud, Oracle Cloud, and Alibaba Cloud.

xScale Joint Venture – Rationale for Equinix

Equinix’s xScale joint venture enables the company to fund capital expenditures for these large deployments in an off-balance sheet model. In turn, this preserves capital for investment into Equinix’s traditional retail data center business and potential M&A activity.

Additionally, Equinix only owns a 20% interest, while GIC owns an 80% interest in the xScale joint venture companies. Therefore, Equinix needs to fund solely its minority share of the capital expenditures in order to build these 32 facilities.

Fee Revenue

Beyond reducing its capital expenditure outlay, Equinix also benefits through the xScale joint venture by generating fee revenue from GIC. Specifically, Equinix generates revenue from sales & marketing, development management, facilities management, and asset management services that it provides to the joint venture. Additionally, upon the sale of an asset from the joint venture, Equinix has the opportunity to earn carried interest.

For the three months ended March 31, 2021, Equinix generated $7.2m of revenue from the aforementioned revenue streams. Indeed, this equates to $28.8m on an annualized basis. With today’s significant expansion of the xScale joint venture, this fee revenue will become more meaningful to Equinix’s overall earnings profile.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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