Canadian Investment Giant Grows Data Center Fund Target With T5 To $8B
QuadReal Property Group is upping its data center investment with T5 Data Centers to $8B.
QuadReal and T5 first launched their $2.5B joint venture six years ago to develop and acquire hyperscale data centers.
The expanded partnership will fuel T5’s scaled campus strategy aimed at meeting the increased demand for artificial intelligence and cloud infrastructure, according to a release. The venture plans to develop data centers with a total capacity of 5 gigawatts — or as much power as 4.3 million households consume in a year.
"This additional investment from QuadReal is another step that enables T5 to pursue its ambitious Scaled Campus strategy supplying AI and Cloud-ready data center capacity to the world's most sophisticated technology companies," T5 CEO Pete Marin said in a statement.
T5 announced in February that it plans to build five gigawatt-scaled data center campuses in U.S. markets, starting in Grayslake, Illinois. The site is expected to include 20 buildings with 60 megawatts of capacity each, with construction on the first phase set to start in 2027, Data Center Dynamics reported.
T5 was advised by Greenhill & Co. and Eversheds Sutherland, and QuadReal was advised by Paul Hastings, Data Center Dynamics reported.
Vancouver-based QuadReal is the real estate investment arm of British Columbia Investment Management Corp. It also has made big financial bets on warehouses in European markets and has a massive presence in U.S. student housing, acquiring and building a more than $4B portfolio and about 24,000 beds.
The increase in investment from QuadReal comes as data center development is rapidly expanding, but also becoming increasingly expensive. Construction for the core and shell of an average data center costs as much as $200 per SF, and infrastructure can cost up to $350 per SF, according to a JLL report.
Data center developers are spending eye-watering sums to accommodate hyperscale Big Tech users. Google is investing $1B to expand its Virginia facilities and another $2B to build new data centers. Microsoft is planning to spend up to $100B in partnership with BlackRock for new data centers to support the growth of AI.
