Blackstone and Digital Realty Form $7 Billion Partnership to Develop Global Data Centers
Posted: December 8, 2023 2:08 AM Updated: December 8, 2023 2:08 AM
Correction and fact check date: December 8, 2023, 2:08 AM
briefly
Blackstone and Digital Realty have partnered to form a $7 billion joint venture to develop data centers globally.
Data center platform Digital Realty and US investment giant Blackstone recently agreed to form a joint venture (JV) that will spend $7 billion on data center development.
The goal of this collaboration is to build four hyperscale data center campuses across three major metropolitan areas in Europe and North America: Frankfurt, Paris, and Northern Virginia. Once completed, total IT capacity is expected to reach 500 MW.
According to the announcement, the project will see Blackstone acquire an 80% stake in the joint venture with an initial capital injection of approximately $700 million, while Digital Realty will retain a 20% stake in the venture.
He added that after signing the contract, both parties will share the remaining development costs proportionately.
“Partnering with Blackstone, the world’s largest alternative asset manager, gives Digital Realty the ability to meet the burgeoning demand of hyperscale clients by accessing a deep pool of like-minded private capital,” said Andy Power, President and CEO. “We are now able to provide better,” he said. Digital real estate representative.
“Digital Realty is focused on executing on the significant opportunities ahead, and this partnership helps accelerate monetization for nearly 20% of our industry-leading land banks,” Power added.
Aims to meet rapidly growing data center demand
Digital Realty will receive a customary fee for its management role in the JV. As part of this project, plans are underway to build 10 data centers with a total potential IT load capacity of 500 MW.
“Data centers are experiencing a once-in-a-generation increase in demand driven by cloud adoption and the AI revolution. “Digital infrastructure is one of the investment themes we are most confident in as a company, and this transaction with a trusted data center operator in Digital Realty is another example of how we are investing behind this trend,” said Blackstone. said Jon Gray, President and COO.
Currently 46 MW is under construction, with a solid 33% pre-lease secured. The remaining land capacity is progressing through various pre-construction stages to meet anticipated customer demand.
Approximately 20% of total potential IT load capacity is expected to be operational by 2025, with the remainder expected to be operational after 2026.
The joint venture, which is expected to close in two phases in the first half of 2024, is subject to regulatory approvals and customary closing conditions.
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Kumar is an experienced technology journalist specializing in the dynamic intersection of emerging fields including AI/ML, marketing technology, cryptocurrency, blockchain, and NFTs. With over three years of experience in the industry, Kumar has established a proven track record in crafting compelling narratives, conducting insightful interviews, and providing comprehensive insights. Kumar’s specialty is producing high-impact content including articles, reports and research publications for prominent industry platforms. With a unique skill at combining technical knowledge and storytelling, Kumar excels at communicating complex technical concepts in a clear and engaging way to diverse audiences.