Urbacon Data Centre Solutions (UDCS) has completed a $320-million financing to accelerate the development of its DC4, DC5 and DC6 data centres at the Barker Business Park Digital Campus in Richmond Hill, just north of Toronto.

“We were very lucky in that there was a lot of interest and a lot of different types of financing — everything from big institutions that wanted to bankroll the entire financing on their own, to private placements, to more conventional bank debt,” UDCS chief operating officer and general counsel Anas Yousef told RENX.

“We landed on an ABS (asset-backed security) structure, given its alignment with a longer-term capital plan. As we roll in further assets, this isn't a one-off, this is more of a platform financing.”

UDCS held about three dozen investor meetings and received commitments from 27 of them, according to Yousef. 

The financing received an A rating from Fitch Ratings and was 4.81 times oversubscribed by both Canadian and American institutional and private investors. It was designated as a green financing due to UDCS' operational efficiency.

UDCS and Barker Business Park

UDCS is a vertically integrated Canadian data centre developer, designer, builder and operator with more than 35 years of experience. It has delivered two million square feet of data centre space and 172 megawatts of capacity.

Land, power and zoning are already secured at Barker Business Park and DC1, DC2 and DC3 are already operating with 62 megawatts of hyperscale data centre capacity. The park will offer approximately 150 megawatts of capacity across six purpose-built facilities when complete.

“We're unique in that we have a 100 per cent hyperscale, single-tenant portfolio,” said Yousef of Barker Business Park. “The risk profile of that is slightly different than colocation, where you might have smaller terms and different sets of ratings on your client list.”

Yousef added that UDCS has a 100 per cent uptime record across its portfolio over the company’s history, which also makes it attractive to investors.

“We're fully vertically integrated and control everything from initial land acquisition and development to the initial planning and architecture to the engineering, construction and then the operation,” Yousef explained. 

“That's all in-house with us and we maintain ownership. We're building a quality asset for ourselves for a long term, which benefits us in efficiency and benefits our clients from a perspective of quality and the ability to expand within the sites.”  

Development and leasing update

All of the power is in place and the underground work at DC4, proposed to be a 203,000-square-foot facility offering up to 36 megawatts of critical power, has been completed. UDCS is waiting until it has a tenant in place before going vertical with construction.

“We've got the permitting and the zoning and all that, so it's just the final tweaks with tenant demands in terms of the internal workings of the data centre,” Yousef said. 

DC3 took about a year to deliver once a lease was signed, according to Yousef, who noted that generators and other equipment are purchased ahead of time in order to get the data centres to market as quickly as possible.

Yousef said UDCS is talking to foreign and domestic companies, hyperscalers and the federal and Ontario governments regarding leasing for DC4.

“We've owned the land for over 20 years and we've been developing the data centre program for over 10 now, which allows us to be a bit more patient in terms of finding that next client mix,” Yousef said. “One thing that we’re looking at is potentially a takedown of DC4, DC5 and DC6 at once and it becoming an interconnected campus for a tenant.

“We're not married to that idea, but we're having those discussions with a couple of players in terms of that larger commitment. But we’re also not averse to the right tenant coming in for just a single asset right now.”

The current focus is on leasing DC4, with a view to expanding to DC5 and DC6. DC5 and DC6 are both proposed to be 195,000-square-foot facilities offering up to 36 megawatts of critical power.

Future growth for UDCS

While Barker Business Park is the obvious current priority, UDCS is looking to grow outside of this location.

“We're constantly looking at new opportunities and discussions are ongoing with utility providers,” Yousef noted. “We tied up some land earlier this year but we haven't announced those projects yet.”

UDCS is based in Toronto so it makes sense to further expand in Ontario, where it also completed: the 242,000-square-foot Toronto 45 Parliament and the 201,000-square-foot Telus Data Centre in Toronto; as well as the 84,000-square-foot Rogers Markham Data Centre in Markham. 

But the company also completed the 250,000-square-foot Bell Gatineau Data Centre in Gatineau, Que. in 2012 and has delivered more than 360,000 square feet of Rogers hub upgrades across Canada, so it’s not limiting its search to its home province.