CDC Data Centres – 31 December 2022 Valuation

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4 January 2023


CDC Data Centres - 31 December 2022 Valuation


Infratil advises that the independent valuation of CDC Data Centres (‘CDC’) as at 31 December 2022
indicates an increase in the value of Infratil’s investment in CDC since 30 September 2022. Infratil’s
48.1% investment in CDC is now valued at between A$2,972.8 million to A$3,551.1 million (with a
midpoint of A$3,239.2 million), up from A$2,648.5 million to A$3,139.1 million (with a midpoint of
A$2,876.4 million) at 30 September 2022. Based on the NZD/AUD exchange rate on 31 December
2022 of 0.93655, the NZD valuation of Infratil’s investment in CDC is $3,174.2 million to $3,791.7
million (with a midpoint of $3,458.7 million).

This valuation increase reflects the benefit of CDC’s recent refinancing and expansion of its debt
facilities, the inclusion of two additional New Zealand developments, and changes to the blended
discount rate used for the valuation. These were partially offset by updates to macro-economic
assumptions, principally an increase in the outlook for the Bank Bill Swap Rate (‘ BBSW’).

During the quarter CDC completed a review of its capital structure, extending the size and tenor of its
bank facilities via a refinancing of its existing debt with materially improved pricing and terms and
undertaking its first debt raise in the US Private Placement (‘USPP’) market. The capital structure
review has provided greater confidence in CDC’s growth funding options as it continues to expand its
footprint and add further capacity to its offering.

In November, CDC officially opened two state-of-the-art hyperscale data centres in Auckland, New
Zealand. The Silverdale 1 (14MW) and Hobsonville 1 (14MW) data centres are the largest and most
secure data centres in New Zealand, with CDC announcing a further increase in their combined
capacity by 12MW. CDC has also acquired further land in Auckland to enable the construction of
additional facilities, underpinned by strong customer demand.

The valuation also reflects that CDC announced that it is expanding its Eastern Creek data centre
campus in Sydney. The campus already houses four data centres, delivering a combined capacity of
123MW, with construction of two more data centres to commence in 2023 to add a further 108MW of
capacity.

The independent valuation assumes 585MW of total built capacity, 268MW is in operation at 31
December 2022, 42MW is under construction and 275 MW is classified as future builds.

The blended cost of equity used in the valuation has decreased from 10.10% to 9.80% between
September and December 2022. This reflects an increase in the risk-free rate (3.60% to 3.75%) and
an increase in gearing as a result of higher forecast debt levels as CDC continues investment in its
existing and new geographies. It also reflects a reduction in the asset-specific risk premium, driven by
reduced refinancing risk as a result of CDC’s debt financing outcomes and a favourable shift in the
valuer’s assessment of CDC’s overall contracted cashflow outlook.

While the average financing margin has decreased from 30 September 2022 as a result of improved
financing terms, the average base rate has increased in line with market expectations and the forward
view of the BBSW curve, thereby increasing the average all-in rate. With the increase in development
cadence driving increased debt drawdowns, the incremental interest payments partially offset the
valuation increase. Forecast net debt as at 31 December 2022 was A$2,040 million.

2
Impact on Estimated FY2023 International Portfolio Annual Incentive Fee

On 15 November 2022, as part of its interim results for the six months to 30 September 2022, Infratil
provided an estimate of its FY2023 International Portfolio Annual Incentive Fee (‘fee’) accrual. Based
on the 31 December 2022 independent valuation of CDC, the estimated fee is $147.9 million, an
increase of $23.6 million since the 30 September 2022 accrual.

However, the assessment of the fee in relation to Galileo, Longroad Energy and RetireAustralia has
not been updated since the 30 September 2022 estimate, and the actual fee at 31 March 2023 will be
determined based on independent valuations of each of the relevant investments at that date.

Any investor enquiries should be directed to:
Matthew Ross
Finance Director
Phone: +64 27 421 1152
Email: matthew.ross@infratil.com