Digital Realty and Blackstone are embarking on a joint venture to develop four hyperscale data center campuses. In this venture Blackstone will acquire an 80% ownership interest for around $700 million of initial capital contributions, and the remaining 20% will be Digital Realty’s.
Following the closing of the deal, which is anticipated to happen in two stages during the first half of 2024, both companies will fund their pro rata share of whatever remains in terms of development costs.
The four hyperscale data center campuses span the globe, located in Frankfurt, Paris, and North Virginia, and are estimated to have a development cost of around $7 billion over the next few years. The campuses will support the construction of 10 data centers with about 500 MW of potential IT load capacity.
Jon Gray, President and COO of Blackstone, stated, “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.”