Two weeks ago, the directors of Bay Farms Ltd agreed to merge their company into Amazon Data Services Ireland Ltd (ADSIL). New filings by the two companies reveal that this is the final step in a property transaction initiated just one year ago to expand Amazon’s sprawling portfolio of data centre sites.

ADSIL acquired the entire share capital of Bay Farms on April 9 last year, but is only disposing of the company now following the end of its accounting year. The net value of the acquisition appears as a €15.8 million asset in ADSIL’s books.

Bay Farms Ltd was established in 1985 under the name AP Dillon & Company Ltd by Alan and Gerard Dillon, the owners of the Co Kildare-based food processing and export business Moyvalley Meats near Enfield. The Dillon family controls a number of associated agri-businesses. Bay Farms, as its more recent name suggests, was the subsidiary holding the title to a 28-hectare tillage farm in the townland of Bay, north of Blanchardstown in Co Dublin.

Bay Farms’ accounts to the end of 2019 show that its only asset was this investment property worth €18.4 million “The property was valued by McPeake Auctioneers, external valuers in January 2020,” the directors reported. This fresh valuation led to a €2.4 million increase in the previous book value of the site.

Since 2016, as its potential transitioned from agricultural to development while industrial and residential projects radiated out of the capital, the company updated the property’s value several times, generating €6 million in taxes owed at the end of 2019 – again the only liability on Bay Farms’s balance sheet.

Hike in value

The €15.8 million price recorded by ADSIL reflects yet another hike in value, with documents showing Bay Farms had €23.4 million in assets and €7.6 million in liabilities at the end of 2020. A €20 million valuation for the site would equate to €290,000/ac, setting a new record above the €220,000/ac paid by Facebook for a similar project in nearby Clonee, Co Meath one year earlier.

The site is indeed worth much more than this to Amazon’s Irish subsidiary, which already has data centres in operation or under development at 11 locations in Dublin and Drogheda. Its revenue from overseas related companies marketing the Amazon Web Services offering to customers grew to €2.6 billion last year. 

Not only is the Bay farm located within the arc of ADSIL sites extending on both sides of Dublin airport, from Mulhuddart to Clonshaugh; the large block of land is also immediately across the road from a high-voltage substation. 

As previously reported, Amazon’s existing and planned data centre capacity in Ireland equals the electricity needs of one million homes. The group has committed to source all this power directly from renewable producers by 2025. In Ireland, its dedicated power trading unit Amazon Energy Eoraip starting buying electricity and selling it to group companies last year, generating just over €834,000 in revenue. This does not yet include any purchases from three directly contracted Irish wind farms, which were not yet operational in 2020.

Regardless of Amazon’s green energy commitment, all this electricity will have to transit through the national grid and a strong connection point is an essential requirement. There are no records yet of a planning application for a data centre on the Bay farm, but this is only a matter of time.

A “development centre” in Ireland

Amazon renamed its existing Web Services subsidiary in Ireland to “Amazon Development Centre Ireland Ltd” last year and the company took over research and development activities from ADSIL in October along with 1,079 employees, filings show. 

Meanwhile, ADSIL retained a 1,159 staff following the separation of functions at the end of December. The combined workforce of both companies, at 2,238, was markedly larger than the 1,575 employed by ADSIL in 2019.

Previously held through Luxembourg, Amazon Development Centre Ireland is now owned by Amazon Ireland Support Services, the group’s customer service and support unit based in Kinsale, Co Cork, which itself doubled its workforce to 1,820 last year.

The accounts for the Development Centre subsidiary do not as yet report any acquisition of intellectual property – the model typically chose by US technology multinationals to locate and manage knowledge and associated profits in Ireland. Instead, the large number of employees transferring to the new unit suggests that it is emerging as a self-contained developer of new technology, associated with the planned opening of Amazon’s engineering centre in offices due for completion at Charlemont Square (pictured) in Dublin’s south city centre next year.

The rapid expansion of these subsidiaries is expected to be completed by the addition of a planned e-commerce warehouse under development in Baldonnell south Co Dublin.