Industrial real estate firm ESR has seemingly dropped plans to develop a data center at one of its sites in Sydney, Australia.
Local press including the Australian and Real Commercial report that ESR is selling a business park in Macquarie Park previously earmarked for data center development.
The company is looking to sell 1.5 hectares at 44-50 Waterloo Rd, which it acquired in 2021 from an AMP Capital fund for AU$71m, and had been earmarked for a data center development. It is currently home to two office and industrial buildings partly occupied by Macquarie University’s School of Engineering.
At the time of the sale, Phil Pearce, CEO of ESR Australia, said: “This landbank investment offers exponential opportunity as it provides holding income to allow a staged redevelopment. The area is well placed to capitalize on the changing office landscape with an increase in demand for decentralized office space since the Covid-19 pandemic.”
ESR filed a SEARS request with the New South Wales planning department last year indicating it was planning to develop a data center on the site. Details of the project weren’t shared, and it seems the filing went no further.
Now, the company has tapped Colliers to try and sell the land to build-to-rent or student accommodation developers. Expressions for interest closed on July 3.
“The Sydney BTR supply continues to lag other national markets, with the sector having difficulty finding feasible sites en masse, principally due to the high land values and the strong competition from traditional build-to-sell projects,” said Colliers national director Guillaume Volz. “44-50 Waterloo Road offers the BTR sector an opportunity to acquire a site specifically targeted at institutional BTR operators, in an area with a strong demographic that will support the take up of the high-level apartment living.”
Another Colliers national director, Trent Gallagher, added: “This landmark development site represents the first build-to-rent opportunity of significant scale to be officially offered to the market for sale within the Macquarie Park precinct. The site’s corner location, three street frontages, and immediate access to rail will make it highly sought after by many astute developers.”
Macquarie Data Centres, NextDC, Vodafone, and Fujitsu have data centers around Macquarie Park. Stockland is also developing data centers in the area.
Ausgrid is planning to develop a new substation, known as the Wallumatta STS, between 2024 and 2029. The transmission company previously built one in the area in 2020.
ESR has traditionally been focused on logistics real estate, but has made a number of investments in the data center space since 2021. The company has several data centers in development in Japan, South Korea, and Hong Kong. It has previously said it plans to build facilities in Sydney, Mumbai, and Singapore. An existing facility in South Korea was sold late last year.
The company was recently said to have acquired land previously earmarked for data centers in Sydney’s Erskine and Horsley Parks – though the precise details aren’t clear.
ESR subsidiary ARA Asset Management also has a data center footprint through its Logos Group unit, which partnered with Pure Data Centres for a 20MW facility in Indonesia, and recently partnered with UEM Sunrise for a 350MW campus in Johor, Malaysia.
