Blackstone and Digital Realty Forge $7 Billion Partnership for Global Data Center Development
In Brief
Blackstone and Digital Realty have partnered to create a $7 billion joint venture for developing data centers globally.
Data centre platform Digital Realty and U.S. investment giant Blackstone recently reached an agreement to create a joint venture (JV) that will spend $7 billion on developing data centers.
The collaboration aims to build four hyperscale data center campuses sprawled across three key metro areas of Frankfurt, Paris and Northern Virginia, in Europe and North America; and upon completion, are anticipated to yield a substantial 500 megawatts (MW) of total IT capacity.
As per the announcement, the project will see Blackstone assume an 80% ownership stake in the joint venture, facilitated by an initial capital injection of approximately $700 million, meanwhile, Digital Realty will retain a 20% interest in the venture.
Following the closing, both parties will proportionally contribute to the remaining development costs, it added.
“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,” Power added.
Aims to Meet Burgeoning Data Center Demand
Digital Realty will receive customary fees for its managerial role in the JV. As part of this undertaking, plans are underway for the construction of 10 data centers with a combined potential IT load capacity of 500 MW.
“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,” said Jon Gray, president and COO of Blackstone.
Presently, 46 MW is under construction, with a solid 33% pre-leasing secured. The remaining land capacity is progressing through various pre-construction phases, aligning with anticipated customer demand.
It is anticipated that approximately 20% of the total potential IT load capacity will be operational by 2025, with the balance set to come online in 2026 and beyond.
Closing in two stages during the first half of 2024, the joint venture is subject to regulatory approvals and customary closing conditions.
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Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
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Kumar is an experienced Tech Journalist with a specialization in the dynamic intersections of AI/ML, marketing technology, and emerging fields such as crypto, blockchain, and NFTs. With over 3 years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and delivering comprehensive insights. Kumar's expertise lies in producing high-impact content, including articles, reports, and research publications for prominent industry platforms. With a unique skill set that combines technical knowledge and storytelling, Kumar excels at communicating complex technological concepts to diverse audiences in a clear and engaging manner.
