In a move to meet the escalating demand for data centers, Digital Realty has partnered with Blackstone to establish a $7 billion joint venture. This collaborative effort aims to develop four hyperscale data center campuses, with the potential to support a total of 500MW of IT load across 10 data centers once fully constructed. With construction already underway for 46MW and a 33% pre-leased occupancy rate, this strategic partnership is poised to make a significant impact on the rapidly expanding data center industry.
Joint Venture Details
The joint venture, a groundbreaking collaboration between Digital Realty and Blackstone, holds the promise of delivering substantial IT capacity. With plans for the construction of four hyperscale data center campuses, this venture is set to support a staggering 500MW of IT load. Currently, 46MW of construction is in progress, signifying the quick strides being made toward achieving this ambitious goal. Moreover, the campuses have already secured a pre-leased occupancy rate of 33%, demonstrating the high demand for hyperscale data center solutions.
Significance of partnership
Digital Realty CEO, Andy Power, emphasizes the partnership with Blackstone as a significant milestone in addressing the mounting demand from hyperscale customers. By teaming up with Blackstone, a trusted global investment firm, Digital Realty can leverage their expertise and resources to maximize the potential of this joint venture. Blackstone will acquire an 80% ownership interest in the venture for $700 million, while Digital Realty will retain a 20% stake.
Growing demand for data centers
According to Blackstone’s President and COO, Jon Gray, the demand for data centers is currently experiencing unprecedented and once-in-a-generation growth. This surge in demand can be attributed to the widespread adoption of cloud technologies and the ongoing revolution in artificial intelligence. With the exponential growth of data-driven applications and the need for robust computing infrastructure, the collaboration between Digital Realty and Blackstone is poised to capitalize on this trend and meet the emerging needs of businesses worldwide.
Financing and development
To ensure the smooth development and operation of the joint venture, Digital Realty and Blackstone will independently finance their share of the development costs. This financial commitment underscores the dedication of both companies to the success of the project. The joint venture is expected to close in two stages within the first half of 2024, subject to regulatory and other necessary approvals. This timeline reflects the complex nature of these projects and the meticulous planning required to bring these hyperscale data centers to fruition.
The partnership between Digital Realty and Blackstone marks a significant milestone in the rapidly evolving data center industry. With a shared vision of meeting the ever-growing demand for hyperscale data solutions, this joint venture will develop four state-of-the-art campuses, capable of supporting a total of 500MW of IT load across 10 data centers. By harnessing the expertise and resources of both companies, this collaboration is positioned to deliver highly efficient, scalable, and secure data center solutions to meet the evolving needs of businesses in the digital era.