Summary
Digital Realty Trust (DLR) announced a significant joint venture with Blackstone Inc. to develop four hyperscale data center campuses across Frankfurt, Paris, and Northern Virginia. This strategic partnership involves Blackstone making an initial capital contribution of approximately $700 million for an 80% ownership stake, while Digital Realty retains a 20% interest and will manage the development and operations. The total estimated development cost for these campuses is approximately $7 billion, designed to deliver about 500 megawatts of IT load capacity over the next several years. This transaction allows Digital Realty to monetize a portion of its development pipeline while retaining operational control and upside through its equity stake. The joint venture is expected to close in two stages during the first half of 2024, subject to regulatory and customary approvals. The deal provides substantial capital for expansion and reduces the immediate capital burden on Digital Realty, enabling it to focus on developing and managing these key hyperscale assets.
Key Highlights
- 1Digital Realty and Blackstone form a joint venture to develop four hyperscale data center campuses in Frankfurt, Paris, and Northern Virginia.
- 2Blackstone will contribute approximately $700 million for an 80% ownership interest in the joint venture.
- 3Digital Realty will retain a 20% ownership interest and will manage development and operations, earning customary fees.
- 4The total estimated development cost for the four campuses is approximately $7 billion.
- 5The campuses are expected to deliver approximately 500 megawatts of potential IT load capacity.
- 646 megawatts are currently under construction and 33% pre-leased, with the remainder to be developed based on customer demand.
- 7The joint venture is expected to close in two stages during the first half of 2024, subject to regulatory approvals and closing conditions.