Infratil's Canberra Data Centres inks deal with Microsoft

Infratil investment Canberra Data Centres has inked a deal with Microsoft to deliver hyper-scale cloud services for government data and has approved the construction of a new data centre.

Wellington-based Infratil has a 48 percent stake in the CDC, which will provide services to handle both unclassified and protected government data, according to a press release from Microsoft. Those services will be available in the first half of 2018 and will "offer unprecedented opportunity through advanced data analytics, sophisticated data protections and artificial intelligence," it said.

CDC currently has two Canberra-based data centre campuses, the only private data centre facilities in Australia with the security controls and accreditations appropriate for the handling of top secret government data. This contract will lift utilisation of existing facilities to 73 percent. As a result, it will develop the 20MW Fyshwick 2 data centre to support growth, Infratil said. Construction is expected to begin in September, following final development approvals.

Infratil spent $411.5 million on CDC, a purchase that was completed in September last year. At the time, 48 percent was also acquired by Infratil's partner, Australia's Commonwealth Superannuation Corporation, with the remaining 4 percent rolled over by existing CDC management shareholders. Taking net debt into account, CDC's enterprise value at the time of purchase was A$1.075 billion.

For the period from acquisition to March 31, CDC's net surplus resulted in Infratil reporting net income of $10.6 million.

According to Infratil's annual report, CDC has 43 federal government departments and agencies as customers, including nine of the 10 largest and more demand is expected from outside of the government sector as companies that provide services to government agencies seek to co-locate their services.

Separately, Infratil reiterated guidance for underlying earnings before interest, tax, depreciation, amortisation and fair value adjustments to be in a range of between $460 million and $500 million in the year ending March 31, 2018. It will provide more detail at its annual meeting on Aug. 24. Underlying ebitdaf was $519.5 million in the year to March 2017.

Infratil's shares recently rose 0.5 percent at $3.135 and have lost 3.5 percent over the past year.