Digital Realty Enhances European Colocation Capabilities with Acquisition of Data Center Campus in Slough

Rhea-AI Summary

Digital Realty (NYSE: DLR) has announced the acquisition of a colocation data center in the Slough Trading Estate for $200 million. This purchase marks Digital Realty's entry into the west London submarket and expands their existing colocation capabilities in London. The acquired campus includes two data centers with a total capacity of 15 megawatts (MW), excellent connectivity, and future expansion potential. Housing over 150 customers, the campus is a critical hub for connectivity providers, technology firms, and financial services. The integration into Digital Realty's Metro Connect solution and ServiceFabric™ platform will enhance global connectivity and digital operations management. Powered entirely by renewable energy, this acquisition aligns with Digital Realty's sustainability goals. Managing Director Séamus Dunne highlights the move as a reinforcement of their commitment to supporting digital transformation in the UK and Europe.

Positive

• Acquired campus includes two data centers with a combined capacity of 15 MW.
• Enhances Digital Realty's presence in the west London submarket.
• Campus houses over 150 customers from various sectors.
• Integration with Metro Connect and ServiceFabric™ enhances global connectivity.
• Campus powered entirely by renewable energy, supporting sustainability goals.

Negative

• Acquisition cost of $200 million may impact short-term financials.

Financial Analyst

Digital Realty's recent acquisition of a data center campus in Slough for $200 million signals a noteworthy enhancement for the company’s European assets. This strategic purchase not only broadens their market presence but also fortifies their ability to offer robust colocation services in the burgeoning tech hub of west London. From a financial perspective, the investment appears judicious considering the pre-existing infrastructure, a well-established customer base and considerable capacity for future growth with 15 megawatts (MW) of power.

For investors, the integration into the Metro Connect solution alongside the access to ServiceFabric™ could potentially drive significant revenue growth. These features can attract more clients due to improved connectivity and scalability, directly impacting the company's top line positively. Furthermore, the acquisition aligns with Digital Realty’s strategic vision of bolstering their global data center platform, which can provide long-term value creation for shareholders through sustained customer acquisitions and expanded service offerings.

Short-term, investors might witness an increase in capital expenditures; however, the long-term benefits such as increased market share and revenue streams from new and existing clients can offset these costs. Additionally, the commitment to sustainability, powering the facility entirely with renewable energy, can enhance the company’s reputation, potentially attracting ESG-focused investors and possibly even lowering operational costs in the long run through renewable energy incentives.

Tech Expert

From a technological standpoint, this acquisition is astute. The Slough data center campus's robust connectivity and existing customer base, comprising over 150 clients including major technology companies and financial services firms, highlights the strategic value. The seamless integration into Digital Realty's Metro Connect and the access to ServiceFabric™, an orchestration platform, significantly enhances operational efficiencies and customer experience.

For tech companies and financial institutions relying heavily on data exchange and interconnection services, the acquisition brings an alluring proposition. Enhanced connectivity means reduced latency and improved performance of critical applications, which is paramount for sectors where speed and reliability are crucial. Additionally, the future expansion capacity ensures that Digital Realty can accommodate scaling demands from its tech-savvy clientele, making this acquisition a forward-thinking move.

Moreover, supporting the facility entirely with renewable energy aligns well with emerging trends and regulatory pressures for sustainability within the tech industry. This approach not only helps Digital Realty meet its sustainability goals but also aligns with the broader industry's shift towards greener data center operations, thereby positioning Digital Realty favorably in the market.

AUSTIN, Texas, July 10, 2024 /PRNewswire/ -- Digital Realty (NYSE: DLR), the leading global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions, today announced the acquisition of a highly connected colocation data center in the Slough Trading Estate for $200 million. The acquisition marks the company's entry into the west London submarket and complements existing colocation capabilities in the City and Docklands.

The newly acquired campus features two individual data centers with a combined capacity of 15-megawatts (MW), excellent connectivity, and room for future expansion. The Slough data center campus is an established hub for a community of 150+ customers, including a broad array of connectivity providers, technology companies, and financial services firms, utilizing over 2,000 cross connects.

In addition to being integrated into Digital Realty's existing Metro Connect solution, enabling seamless connectivity between its six campuses located throughout Greater London, customers will also benefit from access to ServiceFabric™, Digital Realty's open interconnection and orchestration platform. These enhancements will provide customers with unparalleled access to a global, secure, and dynamic data exchange network, further empowering them to effectively manage and scale their digital operations.

Séamus Dunne, Managing Director, Digital Realty in the United Kingdom (UK) and Ireland, commented on the acquisition, "This expansion into Slough is a significant step for Digital Realty, reinforcing our commitment to supporting digital transformation in the UK and across Europe. As the UK solidifies its position as Europe's premier technology hub, this acquisition enhances our ability to support customers as they grow and scale, further establishing our presence in this vital market."

This acquisition not only strengthens Digital Realty's presence in a key market but also supports the company's sustainability goals. Consistent with Digital Realty's commitment to sustainability, the Slough data center campus will be powered entirely by renewable energy, aligning with the company's practice of matching 100% of the energy used in its European portfolio with renewable sources and its goal of achieving carbon neutrality for its European portfolio by 2030.

This strategic acquisition is part of Digital Realty's ongoing commitment to enhancing its global data center platform, PlatformDIGITAL®.

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 data 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

Media Contacts
Will Reynolds
Digital Realty
+44 7469 695775
wreynolds@digitalrealty.com

Investor Relations
Jordan Sadler / Jim Huseby
Digital Realty
+1 737 281 0101
InvestorRelations@digitalrealty.com

Safe Harbor Statement
This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to the United Kingdom and European markets and the Slough data center campus, development plans in the United Kingdom, projections regarding the company's strategy and customer demand and the company's sustainability program, goals and achievements. For a list and description of such risks and uncertainties, see the reports and other filings by the company with the U.S. Securities and Exchange Commission. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

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SOURCE Digital Realty

FAQ

What did Digital Realty (DLR) acquire in Slough?

Digital Realty acquired a highly connected colocation data center campus in the Slough Trading Estate for $200 million.

How much did Digital Realty's (DLR) Slough acquisition cost?

The acquisition cost Digital Realty $200 million.

What is the capacity of the new Slough data center campus acquired by Digital Realty (DLR)?

The Slough data center campus has a combined capacity of 15 megawatts (MW).

How will the Slough data center campus acquisition benefit Digital Realty (DLR)?

The acquisition will enhance Digital Realty's colocation capabilities, expand their presence in London, and support their sustainability goals with renewable energy usage.

How does the Slough acquisition align with Digital Realty's (DLR) sustainability goals?

The Slough data center campus will be powered entirely by renewable energy, aligning with Digital Realty's goal of achieving carbon neutrality for its European portfolio by 2030.