R300m for new Teraco data centres in South Africa

Mergers, Acquisitions and Financial Results

Data centre specialist Teraco Data Environments intends to invest nearly R300m in new data centres in the next 24 months on the back of escalating demand for cloud computing services from corporate SA.

It is also looking to build data centres in Nigeria and Kenya as demand grows elsewhere in Africa for such facilities, says MD Lex van Wyk.

The company will double the size of its main facility at Isando, east of Johannesburg. Construction will begin in January on an additional 2 500m² of space, taking the data centre to about 4 600m².

Demand has been driven by, among other things, growing demand from SA companies for cloud computing services, where applications are hosted online.

Teraco is also looking for a site to build a second Johannesburg data centre, either 30km north or 30km south of the Isando facility. The idea is to link the two sites with fibre to provide disaster recovery capabilities.

At the same time, a second data centre is being planned for Cape Town, where Teraco already operates a 500m² facility in Rondebosch.

The Rondebosch data centre is at 80% of capacity. The new centre, which will have about 2 000m² of capacity, is likely to be built in Pinelands, Van Wyk says.

The company is also poised to build its first data centre in Durban, probably in the Umhlanga region. Van Wyk says he expects to sign a lease for a property by the end of the week. The Durban site will be 500m² in size, expanding to 1 000m² over time.

Van Wyk says other African markets are also of appeal to Teraco. Nigeria, Kenya, Ghana, Zambia, Botswana and Mauritius are all potential sites for data centres, he says, though Nigeria and Kenya will probably be the first because of the relative size of those economies.

He admits building data centres elsewhere in Africa will prove more challenging than in SA given electricity supply is highly unreliable. Any data centre investment would need an investment in power generation.

Despite this, Van Wyk says it’s the right time to invest in other African markets.