Real estate investor PGIM has purchased a 20.7-hectare site in Melbourne, Australia, for an AU$1.2 billion ($850m) data center.

The site on Oroya Drive, in Melbourne’s Truganina suburb, has been purchased through PGIM’s Global Data Center Fund.

Though the company has not disclosed the purchase price, a report from the Australian Financial Review claims PGIM paid AU$8 million per hectare, meaning the site cost around AU$165.6 million ($117.9m).

PGIM said it intends to spend an initial AU$1.2 billion ($850m) on the site in the first of three planned stages of development.

Planned capacity of the data center, and construction timelines, have not been shared.

“Demand for digital infrastructure has remained strong, with many leading hyperscalers announcing plans to develop or take up a significant amount of capacity in and around Melbourne,” said Morgan Laughlin, global head of data center investments at PGIM’s real estate business.

AFR reports PGIM is also in discussions to purchase another data center site in Melbourne, but that deal has yet to close.

PGIM’s data center fund was set up to invest in digital infrastructure projects around the world. News of the fund’s existence was first reported in May 2024, though it has been active since 2023, when it raised an initial $450 million.

Last year, it closed its own fundraising, having secured a total of $2 billion from a range of banks and institutional investors.

Prior to the fund being set up, PGIM invested in data centers regularly for more than a decade. It previously owned a portfolio of US data centers alongside Digital Realty, which it later sold to Menlo Equities.

In 2024, it acquired land in Munich, Germany, for the development of a data center. Bought for its closed-end value-add fund, European Value Partners (EVP) II, the investment firm said the site can offer 30MW.

The firm has also invested in several JVs with Equinix in Australia and the US to fund the development of hyperscale data centers under the colo firm’s xScale brand.