- What Compass Datacenters has bid on two land parcels in Milton
- Why The U.S.-based company is looking to build a 300-megawatt data centre campus
- What next More large data centre deals are expected as tech companies look to the GTA
Compass Datacenters has offered $220m for two parcels of land outside Toronto, Green Street News can reveal.
The Dallas, Texas-based company is in talks to buy 280 acres, 110 of which are developable, at 7314 Sixth Line in Milton, where it would construct a 300-megawatt data centre campus. The land is part of M. Putzer Hornby Nursery, a 450-acre wholesale plant nursery that is owned and operated by the Putzer family. Lee & Associates marketed the site as an industrial opportunity.
Compass’ bid works out to approximately $2m/acre of developable land. The company is owned by Brookfield Infrastructure Partners and Ontario Teachers’ Pension Plan.
A spokesperson for Compass declined to comment on the “pending transaction.” Lee & Associates did not respond to a request for comment.
If it closes, the purchase could be among the priciest land transactions in the GTA for data centre development. The parcels are extremely attractive as they’re close to a local power transmission station as well as a hydro corridor with existing power capacity of 3,000 megawatts. That capacity also can be expanded in the future by utility provider Hydro One.
“Sites like these are very rare in the Toronto marketplace,” a broker with knowledge of the GTA data centre market told Green Street News. “It’s a unicorn.”
Market pros estimate that costs to build the data centre campus would run around $250m, including the price of the land. In addition to land and development costs, an onsite substation would be needed to transform and distribute power through the site.
There are also concerns over network connectivity.
Microsoft, which has bought land in the Toronto area for three future data centres to power its AI operations, is looking to secure 1,000 megawatts of capacity in the region in the next 10 years. The tech behemoth had mulled purchasing the Putzer site but ultimately passed without making a bid due to concerns over “network connectivity,” a source with knowledge of the area said.
Compass is said to have extended its due diligence period for evaluating the property.
If the firm opts not to buy, another major player could be waiting to pounce.
In March, it was reported that Prologis, a global leader in the industrial space, is looking to make a $25bn pivot to data centres. Prologis has two warehouse properties in Milton, among several in the GTA, and recently poached Compass co-founder Chris Curtis to head its data centre development.
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