Blackstone and Digital Realty Join Forces in a $7 Billion Venture for Global Data Centers Development

Data centre platform Digital Realty and U.S. investment giant Blackstone The two companies recently formalized a partnership that will channel $7 billion into a new joint venture focused on data center development. data centers .

Their collaborative efforts will aim to construct four state-of-the-art data center campuses located in key metropolitan areas such as Frankfurt, Paris, and Northern Virginia, enhancing infrastructure across regions. Europe This initiative in North America is expected to deliver a remarkable total of 500 megawatts (MW) of IT capacity once completed.

According to their shared announcement, Blackstone will hold an 80% stake in the joint venture, kicked off by a substantial initial investment of around $700 million, while Digital Realty retains a 20% interest.

Post-closing, both firms will proportionately cover the ongoing development expenses, as indicated in the announcement.

"Teaming up with Blackstone, the preeminent alternative asset manager globally, empowers Digital Realty to meet the rising demands of our hyperscale clients by tapping into a vast network of similar private investment,\" expressed Andy Power, CEO of Digital Realty.

"Digital Realty is poised to leverage the considerable opportunity ahead, and this collaboration is crucial for accelerating the monetization of nearly 20% of our extensive land holdings,\" Power added.

Targeting Increasing Demand for Data Centers

In this joint venture, Digital Realty will earn standard management fees. The plan includes constructing 10 data centers, collectively capable of supporting a significant IT load of 500 MW.

"Demand for data centers is soaring, presenting a once-in-a-lifetime growth opportunity, powered by technological advancements. Digital infrastructure remains a core investment focus for us, and this alliance with a trusted operator like Digital Realty exemplifies our commitment to this trend,\" stated Jon Gray, President and COO of Blackstone. cloud adoption and the AI revolution Currently, 46 MW is actively being built, with an encouraging 33% already leased. The remaining land development is advancing through pre-construction stages to align with anticipated customer demand.

It is projected that around 20% of the expected IT load capacity will be operational by 2025, with additional capacity poised to come online in 2026 and beyond.

The completion of this joint venture will occur in two phases in the first half of 2024, pending regulatory approvals and standard closing requirements.

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