Building New Sites in Data Centers

Building New Sites/Data Centres
 Development: NEXTDC is involved in the development
of data centres, including the new site for S3 as well as
the ongoing expansion at M2 and S2. Generally,
development projects have a number of risks
including (i) the risk that suitable sites or required
planning consents and regulatory approvals,
including approvals from the local water authority
and the local power distribution grid operator, are not
obtained or, if obtained, are received later than
expected, or are adverse to NEXTDC’s interests, or
are not properly adhered to; (ii) the escalation of
development costs (including the costs of construction
and fit out and any associated delays) beyond those
originally expected; (iii) unforeseen project delays
beyond the control of NEXTDC including for example
the impact of the COVID-19 pandemic; and (iv) nonperformance/breach of contract by a contractor or subcontractor. Increases in supply or falls in demand could
influence the acquisition of sites, the timing and value
of sales and carrying value of projects. To
fundamentally manage these risks, NEXTDC has
implemented governance and management processes
designed to drive consistency in the planning, design,
engineering, procurement and project and commercial
management for each site.
 Customer Demand: Development of new and existing
data centres is capital intensive and sometimes
undertaken without pre-sales commitment from
customers. There is a risk that there will not be enough
customer demand to achieve a sufficient return on
investment. NEXTDC’s business model to become the
largest independent, carrier neutral channel
ecosystem in the Asia-Pacific region aims to
manage this risk by developing sites mindful of
market demand and customer needs with the aim of
offering a service and connectivity compelling to our
customers. NEXTDC’s next-generation of data
centres will be particularly focussed on more

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