Digital Realty, a provider of Cloud and carrier-neutral data center, colocation and interconnection solutions, and Blackstone, a renowned global asset management firm, have agreed to establish a Joint Venture (JV) to develop four hyperscale data center campuses across three metro areas on two continents.
In a press release, Blackstone said, “The four hyperscale data center campuses are located in Frankfurt, Paris and Northern Virginia and have a total estimated development cost of approximately US $7 Billion over the course of the next several years.”
It further said, “The campuses are planned to support the construction of 10 data centers with approximately 500 MW of potential IT load capacity.” Blackstone says that, of this capacity, 46 MW is under construction and is 33 per cent pre-leased. “The remaining land capacity is in varying phases of pre-construction and is expected to be developed to meet customer demand. Approximately 20% of the total potential IT load capacity is expected to be delivered through 2025, with the balance expected to be delivered in 2026 and beyond.”
stone
Explaining the details of the deal, it said, “Blackstone will acquire an 80 per cent ownership interest in the joint venture for approximately US$ 700 Million of initial capital contributions, while Digital Realty will maintain a 20 per cent interest.”
“By partnering with Blackstone, the world’s largest alternative asset manager, Digital Realty is better able to deliver capacity to meet the burgeoning demand of our hyperscale customers, by accessing a deep pool of likeminded private capital,” said Andy Power, President and Chief Executive Officer of Digital Realty. “Digital Realty is focused on executing on the sizable opportunity that lies ahead and this partnership helps to accelerate the monetization of nearly 20 per cent of our industry-leading land bank.”
Jon Gray, President & COO of Blackstone, said, “Data centers are experiencing once-in-a-generation demand growth, driven by cloud adoption and the AI revolution. Digital infrastructure is one of our highest conviction investment themes as a firm, and this transaction with a trusted data center operator in Digital Realty is another example of how we are investing behind this trend.”
The joint venture is scheduled to close in two stages over the course of the first half of 2024, subject to certain regulatory and other approvals, as well as other customary closing conditions.