In a major deal between the industry’s two largest players, Digital Realty has agreed to acquire eight data centers being divested by Equinix as part of the colocation firm’s purchase of Telecity Group. Meanwhile, Equinix now has an option to acquire a Digital Realty facility in Paris, strengthening its presence in a major European capital.
CEO Bill Stein said the deal will offer Digital Realty greater scale in the increasingly important European data center landscape.
“We have made several recent strategic investments in Europe, and this new portfolio – which is concentrated in three of the most strategically important data center and interconnection hubs in Europe – will immediately bring on board a large, diversified customer base and will also provide significant opportunities to grow and extend our footprint across the continent for years to come,” said Stein.
Immediate Presence in Frankfurt
Significantly, the deal will accelerate Digital Realty’s entrance into Frankfurt, a major European financial services hub where it currently has no presence. In March the company purchased land near Frankfurt for a 27-megawatt data center campus, which will come online in late 2017. the former Telecity
The sale of the eight facilities was required by the European Commission as part of its regulatory review of Equinix acquisition of TelecityGroup, which closed in January. The data centers being acquired by Digital Realty include:
- Four TelecityGroup sites in London, including Bonnington House, Sovereign House, Meridian Gate and Oliver’s Yard.
- Equinix’s West Drayton data center in London.
- TelecityGroup’s Science Park and Amstel Business Park I in Amsterdam.
- TelecityGroup’s Lyonerstrasse data center in Frankfurt.
The portfolio spans 213,000 square feet and 24.4 megawatts of IT load, and use 72 percent of their available power capacity. These data centers serve 650 clients, who are concentrated in the network, cloud, content and digital media and financial services verticals.
There is also some upside for Digital Realty to lease completed space and build out additional data halls. The eight sites include 6.9 megawatts of available power and 62,700 square feet of space immediately available for lease. The portfolio also features expansion space in London and Amsterdam, which could add another 14.9 megawatts of capacity in two of Europe’s busiest data center markets.
Equinix Boosts Paris Presence
In a separate transaction, Equinix negotiated a binding option to acquire Digital Realty’s operating business including its real estate and facility in St. Denis, a section of Paris where Equinix operates two International Business Exchange facilities (PA2 and PA3). The acquisition is expected to complete in the second half of 2016.
“Both of these deals today enable us to focus on increased growth of the Equinix portfolio,” said Steve Smith, president and CEO, Equinix. “We are pleased to reach this divestiture milestone to satisfy the European Commission requirements, as agreed to with our purchase of TelecityGroup.
“Additionally, our proposed purchase of the Paris land and business assets from Digital Realty is a key step in our strategy to invest behind our customers and ecosystems in locations where we have sizable campuses – this includes Paris,” said Smith.