Digital Realty and TPG Real Estate have entered into a joint venture in which TPG will acquire a majority stake in three Digital Realty data centres in Northern Virginia.
Digital Realty, which will keep a minority interest in the facilities, will continue to manage the day-to-day operations of the hyperscale data centres. Combined, the facilities provide 104 MW of IT capacity and are leased inn the most part to investment grade customers.
“We welcome this partnership with TPG, a highly distinguished investment partner,” said Digital Realty Chief Investment Officer Greg Wright.
“The completion of this stabilised hyperscale data centre joint venture bolsters and diversifies Digital Realty’s capital sources with an experienced partner and further enhances the efficiency of our balance sheet. We remain focused on positioning Digital Realty to prudently support our stakeholders’ longer term capacity requirements and look forward to executing on the remaining elements of our capital plan for 2023.”
Digital Realty is set to receive roughly $1.3 billion from the joint venture, which the company has said will be used to pay down debt
TPG is investing in the venture through TPG Real Estate Partners, TPG Real Estate’s estate fund series.
“Demand for data centres continues to grow rapidly due to data proliferation and the mass adoption of cloud computing. These are long-term trends that we expect will only be accelerated by recent advancements in AI,” added Ty Newell, Business Unit Partner with TPG Real Estate.
“Located in the largest and most densely connected data centre hub in the world, the Portfolio is well-positioned to address this demand. We are excited by the outlook for the Ashburn market and look forward to working alongside a world-class partner in Digital Realty.”