Equinix, PGIM Real Estate Join Hands to Develop & Operate Data Centers in Sydney

Digital infrastructure company Equinix, Inc. (EQIX) has entered into an agreement with PGIM Real Estate, a real estate investment and financing arm of Prudential Financial’s global asset management business, to set up a $75 million joint venture in the form of a limited liability partnership to develop and operate two xScale data centers in Sydney, Australia.

The two data centers, SY9x and SY10x, are likely to deliver 55 megawatts of power to cater to the specific needs of a group of hyperscale companies. Among the two data centers, SY9x is expected to open in the first quarter of 2022.

As per the terms of the agreement, PGIM Real Estate will have an equity interest of 80% in the joint venture and the remaining 20% will be owned by Equinix. Further, the joint venture is likely to close in the fourth quarter of 2021.

The CEO of Equinix, Charles Meyers, said, “Our new relationship with PGIM Real Estate follows our successful partnership with GIC and will enable the world’s largest hyperscalers to expand within the Equinix ecosystem in Australia.” (See Equinix stock chart on TipRanks)

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Recently, Wolfe Research analyst Andrew Rosivach initiated coverage on the stock with a Sell rating. The analyst’s price target of $740 implies downside potential of 3.6% from current levels.

Although the analyst believes that the company has a strong moat to supports its growth in the future, near term cyclical tailwinds could hurt its prospects.

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 8 Buys, 2 Holds and 1 Sell. The average Equinix price target of $876.50 implies that the stock has upside potential of 14.2% from current levels. Shares have declined about 5.2% over the past year.

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