Principal to build Texas data centre for US pension fund

The State of Michigan Retirement System is funding the development of a data centre by Principal Real Estate Investors.

The pension fund approved a $37m (€34m) commitment to the project, in Dallas, Texas, according to a board meeting document.

Principal Real Estate Investors, which manages a separate account for the State of Michigan, is expected to complete the 145,000sqft Parkwood Data Center by November this year.

Brian Sandfort, a managing director for Principal, said: “We are developing this property in a joint venture with Stream Data Centers.

“This is our third data centre project with them. The other two assets are located in Dallas and San Antonio.”

Parkwood will be able to cater for five tenants but Sandfort says Principal was “hopeful of being able to lease the property to a single tenant”.

He cited several factors that made the Legacy area of Dallas attractive for data centre investors. “There are a lot of corporations located in the region,” he said.

“It’s out of the flight patterns so companies don’t have to worry about a plane crash destroying all of their data. There is the right amount of power in the buildings to serve the company’s needs.”

Michigan State also revealed that it was investing $25m in Asana Partners Fund I, a value-add fund focused on buying US retail assets.

The fund has attracted capital from a number of pension funds, including – most recently – The New Mexico State Investment Council.