Blackstone and Digital Realty Partner To develop $7B Data Centers By CIOTechOutlook Team

Blackstone and Digital Realty Partner To develop $7B Data Centers

CIOTechOutlook Team | Friday, 08 December 2023, 09:14 IST

Digital Realty launched a collaborative venture with Blackstone-affiliated funds led by Infrastructure, Real Estate, and Tactical Opportunities to create four hyperscale data center facilities across three metro areas on two continents. When all campuses are fully built up, the developments are planned to sustain roughly 500 megawatts (MW) of total IT demand.

Blackstone will acquire an 80% ownership interest in the joint venture for approximately $700 million of initial capital contributions, while Digital Realty will maintain a 20% interest. Subsequent to closing, the joint venture parties will fund their pro rata share of the remaining development costs, as per digital.

The four hyperscale data center campuses are located in Frankfurt, Paris, and Northern Virginia and are expected to cost around $7 billion to develop over the next several years. The campuses are intended to accommodate the development of ten data centers with a total potential IT load capacity of 500 MW.

"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% of our industry-leading land bank."

Greg Wright, Chief Investment Officer of Digital Realty, added, "Partnering with Blackstone marks the culmination of a record year of capital recycling and aptly reflects the shift in our funding strategy, to diversify our sources of capital and bolster our balance sheet in order to capitalize on the significant opportunity that lies ahead."