PGIM Raises $2B From Data Center Fund Planning to Deploy 'Build-Fill-Sell' Strategy
PGIM Real Estate is looking to deploy capital in the hot data center space and has raised $2 billion. It comes from the investment manager's Global Data Center Fund (GDCF), which attracted worldwide investors.
The goal of the fund is to use a "build-fill-sell" strategy, so it could maximize returns, according to a statement from PGIM. The investments will focus on hyperscale low-latency data centers through multiple global regions including Asia Pacific, Europe, and North America.
"The Global Data Center Fund strategy creates value through asset-level development joint ventures with leading data center operators. Retaining an operator-independent approach allows the Fund to access attractive investment opportunities in supply constrained markets through its deep range of operator relationships," PGIM said in a statement.
"ESG considerations are factored into each investment decision with a defined asset allocation to buildings with a green building certificate."
So far, $450 million in capital for the data center space has been allocated through PGIM. It's unclear if that entire amount came from the GDCF, but the company said it plans to deploy what's left from the fund over the next year and a half.
The Newark, New Jersey-based firm also announced a distribution partnership deal with an unnamed private bank to raise assets globally for the GDCF.
To start 2025, there have been a number of data center investments and fundraising in the billions announced across CRE. This includes Blackstone's energy investment unit agreeing to acquire a 74-megawatt natural gas-fired power plant located in Loudoun County. Reuters reported the deal to be worth roughly $1 billion. The BlackChamber Group got a $1.2 billion loan to develop four data center campuses in Northern Virginia, and EDGNEX Data Centers by DAMAC announced it would enter the U.S. market with a $20 billion investment that includes existing data centers and platforms. Additionally, EDGNEX noted that there is potential to double its initial $20 billion pledge.
"Data centers are at the heart of the digital framework that is playing an increasingly critical role across our economy and society," Morgan Laughlin, managing director and global head of data center investments for PGIM, said.
"In line with the recognition of the importance of digital infrastructure in our modern lives, global investors are rapidly increasing their exposure to the sector."
Source: GlobeSt/ALM