Meet The Low-Key Local Property Company That Lined Up A £4B Data Centre Deal

When planning permission was granted in January for a new £4B, 2M SF data centre near Borehamwood, 14 miles north-west of London, it was hailed at the very top of the UK government.

The project, reportedly the largest cloud and artificial intelligence data centre in Europe, was held up as an exemplar after the new Labour government reclassified data centres as critical infrastructure to help get them through planning. A press release featured warm words from Minister of State for Data Protection and Telecoms Sir Chris Bryant as well as the leader of the local Hertsmere Borough Council.

What communications around the scheme failed to offer was any information about who was behind the scheme — no quotes from anyone at DC01UK, the company listed as owning it, no hint of who was behind a project that cost so much and arrived with so much fanfare.

The answers are surprising.

DC01UK is a special-purpose vehicle that owns only this single project. The SPV is ultimately owned by two local property and infrastructure investors: Griggs Homes and Andy Brewer.  

Data centres, especially for huge projects, are usually owned and built by the tech giants that use them, like Microsoft or Google, financial giants like Blackstone or Starwood, and specialist operators like Pure Data Centres Group or DigitalBridge Group.

So how did a small-scale local company fly under the radar and put together a scheme that could ultimately be worth £4B, with a sale of the project now in view, in one of the hottest sectors in global real estate?

“We have assembled a very strong team of market leaders, of advisers, and we've immersed ourselves in every aspect of this sector,” Griggs Homes Director James Craig told Bisnow.

In a rare interview, Craig explained how a company that had no experience in the data centre sector just five years ago repositioned itself as a leading player in the development push happening in this part of north-west London. 

It is a tale of property entrepreneurialism that is becoming rare in a field dominated by bigger players, one that involves a company taking on a particularly complex real estate sector and bringing together global forces and detailed local knowledge about how, where and when electricity can flow.

“I'm not the expert in operating a data centre,” Craig said. “But I would say we've carved out a niche, and I don’t want to sound arrogant here, but we're one of the most experienced players now in understanding the land and power required and planning requirements for the data centre sector in the UK.”

DC01UK is owned by Craig's Griggs Homes and Brewer, an investor with interests in renewable energy among other sectors, with Griggs Homes leading the project. 

The company specialises in land assembly and promotion, putting together sites and taking them through planning. It undertakes some development itself, often in joint ventures. Until 2021, that typically involved residential schemes with some industrial and logistics units, although Craig said the company also worked with nearby Watford Football Club on plans to move the team to a new stadium. 

The plans fell through when Watford was relegated from the Premier League, a doubly painful blow for Craig, who is an avid fan of the team. 

During the pandemic lockdown, DC01UK purchased a 16-acre site near the M25, half of which had been used to develop a hotel, the other half undeveloped. It planned to build a new 300K SF logistics scheme. The site was near a National Grid electricity substation in Elstree, so the company reserved 120 megawatts of power for the development. 

Logistics land values were skyrocketing in 2021. But by 2022, sharp rises in interest rates took the steam out of the sheds market. 

The London data centre market had traditionally been concentrated to the west of the capital near Slough, but concerns about power availability in the area were driving occupiers and operators to look at other places close to the city for new development, including to the north-west around Watford and Borehamwood — close enough to London to be viable for the tech companies that build or take space in data centres and home to new schemes from NTT and Google.

After holding talks with a hyperscale data centre occupier that ultimately came to nothing, DC01UK's site and its power were sold to Ark Data Centres. 

But the process of putting together the site, securing the power and negotiating with hyperscalers and data centre operators gave the firm insight into what is needed to bring forward major data centre schemes, and it sought further projects in the sector. 

The company then secured 160 MW of power for another nearby site but sold the power to an operator building a site in Southall, west London. 

Also in the area, an application had been submitted by another developer for a battery storage facility next to the Elstree substation, which would have had the capacity to store 400 MW. 

A battery storage facility has what is called a power generation connection, meaning it ultimately provides energy to the grid. Griggs teamed up with power consultants and the facility’s developer to work with National Grid to change this from a generation to a demand connection, which would allow the power to be used for a data centre instead.

“We worked for several months with National Grid to demonstrate to them that there would be no detriment to the wider network, no negative impact on any other customers,” Craig said.

It was the first time such a switch was undertaken in the UK, he said. 

That connection of 400 MW allowed for a big data centre development. The question was where to build it.

Advised by Knight Frank, DC01UK partnered with Wrotham Park Estates for its current scheme, building on land owned by the estate near the A1. The original house at Wrotham Park dates back to 1754 and was built for Admiral John Byng, a navy officer who was ultimately executed by firing squad for failing to defeat the French in a sea battle near Spain, a decision considered harsh even at the time. The house and land remains in the Byng family. 

The 85-acre site for the scheme lies in the protected green belt around London, but received special designation for development and forms part of the government's infrastructure push. 

With power secured and a site identified, Griggs ran exhibitions to explain the benefits of the scheme to the local community, where there was opposition. That put the project on the radar of the government, which ultimately championed it as part of its infrastructure investment push. 

Now that planning is in place, Craig said the scheme is likely to be sold, with the current owners perhaps retaining a stake. A total cost of more than £4B will require someone with a big cheque. 

“We've got lots of exciting and interesting conversations going on with a plethora of different organisations,” he said. “Some of the big financial institutions and other operators, there is no shortage of interest for a site with its scale, with its power connection, with its location.”

Further into the future, Craig and Griggs are working on persuading the government to designate its local stomping ground as an official AI growth zone, which would attract more data centre development to the area. He is also on the lookout for more deals in the sector.

Get it right, and returns can be significantly higher than for industrial development.

And with Griggs showing that small players can pull together huge schemes in the sector, plenty of other firms could look to repeat the trick. 

“It feels like we’re playing a game of Whac-A-Mole every day at the moment, because we're getting people coming to us saying, ‘I've got this site for a data centre.’ Yeah, well, it's in the middle of nowhere, and it's got no power,” he said. “Everybody's trying to jump on this.”