Australian data center firm DXN is exiting its Sydney facility and aims to exit its other two locations to focus on its modular container business.

“DXN and the landlord of its Sydney data center located at 5 Parkview Drive have signed a deed of surrender,” the company said in an ASX trading update this week.

DXN sydney 5 Parkview Drive australia
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As a result, the company will exit the lease – which had nine more years left to run – and leave the site by the end of February 2024.

Located in Sydney’s Olympic Park, DXN’s Tier III certified SYD01 data center offers 5.5MW across 4,350 sqm (47,825 sq ft), with capacity for up to 725 racks. The single-story facility launched in 2019 in a repurposed warehouse.

The company said the exit includes a deferred settlement of AU$800,000, paid over 18 months, but will save the company an estimated AU$1.4 million overall.

DXN said it aims to remove its modules from the site and repurpose them to sell to customers.

The company will be relocating existing colocation customers to an alternative data center in Sydney, where they will still be serviced by DXN. Details of which facility weren’t shared.

DXN currently operates two other data centers in Hobart in Tasmania and Darwin, but the company could soon exit both. The company said it is reviewing options to sell one or both assets.

In a Chairman’s address this week, Peter McGrath said DXN aims to exit all of its data centers to concentrate on delivering data center modules.

“It is our intention to exit the ownership and operation of [our] data centers segment – whereby we own three facilities today,” the company said. “We will only do this, however, where it makes sense [and] where we receive reasonable returns for the facilities to be sold.”

DXN said two facilities generate “good returns,” but those returns are “not high enough for the capital invested.”

The company, formerly known as Data Exchange Network, acquired the Hobart data center from TasmaNet in 2020; the site offers capacity for 30 racks, expandable to 100. The company acquired the Secure Data Centre in Darwin in 2021; at the time the 350 sqm (3,700 sq ft) bunker facility offered 70 racks with scope to expand to 127 racks.

The company has delivered dozens of modules to customers including AngloAmerican, gold-miner Newcrest to a site in New South Wales, as well as Boeing, Covalent Lithium, and Pilbara Minerals in Western Australia. DXN has previously delivered a landing station module to on the Cocos (Keeling) Islands for the Oman – Australia Cable, and to the island of Palau for the Meta/Google-led Echo subsea cable.

In August 2022, data center firm DXN announced that it was going to be selling all "business assets and subsidiaries" to Flow2Edge, the data center investment platform from investment manager PAG Real Estate. By September, the deal was amended for Flow to only acquire DXN’s modular manufacturing unit, before falling through entirely by November 2022 and instead forming a distribution partnership for the modules across APAC.