Mitsubishi Acquires 65% Equity Interest in Two
Data Centers Currently Under Construction in the Dallas Metro Area, with Up to 48 Megawatts of
Potential IT Load
AUSTIN,
Texas, March 4, 2024 /PRNewswire/ -- Digital
Realty (NYSE: DLR), the largest global provider of cloud- and
carrier-neutral data center, colocation and interconnection
solutions, and Mitsubishi Corporation, announced the formation of a
new joint venture to support the development of two data centers in
the Dallas metro area, which are
100% pre-leased to an S&P 100 investment grade customer on a
long-term basis. Mitsubishi has acquired a 65% equity interest in
the venture for an initial contribution of approximately
$200 million, while Digital Realty
maintains a 35% interest and will manage the development and
day-to-day operations of the joint venture, for which it will
receive customary fees. Each partner will fund its pro rata share
of the remaining $100 million
estimated development cost for the first phase of the project,
which is slated for completion and commencement in late
2024.
The two data centers commenced construction in the fourth
quarter of 2022, with the first phase slated to deliver 16
megawatts (MW) of initial data center capacity. The budget for the
first phase of these yield-on-cost developments is approximately
$400 million. The customer maintains
the option to expand the projects up to 48 MW of total IT load
during the initial lease term, which could increase the combined
budget up to $800 million, based on
current development cost estimates.
"We are delighted to expand our partnership with Mitsubishi,"
said Digital Realty Chief Investment Officer Greg Wright. "This development joint venture
leverages the success of our established Japanese partnership into
the United States, while
supporting our customer's data center requirements with a
like-minded, long-term investor. The transaction enhances Digital
Realty's balance sheet, providing incremental capital to prudently
support our stakeholders' longer term capacity requirements."
Wells Fargo Securities served as financial advisor to Digital
Realty on the transaction.
About Digital Realty
Digital Realty brings
companies and data together by delivering the full spectrum of data
center, colocation and interconnection
solutions. PlatformDIGITAL®, the
company's global data center platform, provides customers with a
secure data meeting place and a proven Pervasive Datacenter
Architecture (PDx®) solution
methodology for powering innovation and efficiently managing Data
Gravity challenges. Digital Realty gives its customers access to
the connected communities that matter to them with a global data
center footprint of 300+ facilities in 50+ metros across 25+
countries on six continents. To learn more about Digital Realty,
please visit digitalrealty.com or follow us
on LinkedIn and X.
For Additional Information
Investor Relations
Jordan Sadler / Jim Huseby
Digital Realty
+1 737 281
0101
InvestorRelations@digitalrealty.com
Media Contacts
Helen
Bleasdale
Digital Realty
+1
737 267 6822
hcbleasdale@digitalrealty.com
Safe Harbor Statement
This press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act of 1934, as amended. When used in this press
release, the words "estimated," "anticipated," "expect," "believe,"
"intend," "continue," "should," "may," "likely," "plans," and
similar expressions are intended to identify forward-looking
statements. Forward looking statements include statements
related to the joint venture, the data center development,
expansion options, lease terms, cash lease yields, disposition,
customer demand, expected benefits, use of proceeds and strategy.
These forward-looking statements are based on current
expectations, forecasts and assumptions and are subject to risks,
uncertainties, and assumptions that could cause actual outcomes and
results to differ materially. Some of the risk factors that
could cause actual results to differ materially are, among others,
the timing and ability to consummate the pending transaction or the
occurrence of any event, change or other circumstance that could
delay closing or result in the termination of the agreement for the
transaction. Other factors that could cause results to differ
materially are described in the filings made from time to time by
Digital Realty with the U.S. Securities and Exchange
Commission and include the risk factors and other risks and
uncertainties described in Digital Realty's Annual Report on Form
10-K for the fiscal year ended December 31,
2023 and Quarterly Reports on Form 10-Q and subsequent
filings. Readers are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements are
not guarantees of future plans and performance and speak only as of
the date of this press release. Except as required by law,
Digital Realty does not undertake any obligation to update or
revise forward-looking statements, whether as a result of new
information, future events, or otherwise, or publicly release the
results of any forward-looking statements that may be made to
reflect events or circumstances occurring after the date hereof or
the occurrence of unanticipated events.
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SOURCE Digital Realty Trust