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May 16, 2016updated 05 Sep 2016 11:43am

Digital Realty set to buy eight Equinix European data centres

News: Hubs represent an overall addition of 302,000 sqft of space and 40 MW of power.

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Collocater Digital Realty has unveiled plans to buy eight data centres from EMEA’s largest collocation provider Equinix for $874m.

The sought after portfolio consists of five hubs in London, two in Amsterdam and one in Frankfurt, all of which mostly come from Equinix’s acquisition of TelecityGroup. The transaction is expected to be closed in H2 2016.

Together, the facilities will add 213,000 sqf of commercial floor space to Digital Realty’s footprint, totalling 24.4 MWs of power.

The eight data centres represent an extra available capacity of approximately 6.9 MWs of fully-installed power and 62,700 net sellable square feet immediately available for lease, as of March 31, 2016.

In London, the five sold hubs include Equinix’s West Drayton data centre, and Telecity’s Bonnington House, Sovereign House, Meridian Gate, and Oliver’s Yard facilities.

With the acquisition, Digital Realty is also set to gain the rights previously given to Equinix to expand some of the facilities.

The London and Amsterdam hubs could add up to another 14.9 MWs of power capacity and 88,900 net sellable square feet to support future growth.

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Digital Realty will acquire a fee interest in one data centre in Amsterdam and will acquire leasehold interests in the other seven data centres, with a weighted-average remaining lease term of approximately 23 years, including the exercise of contractual extension options.

In addition, several of the leased facilities are entitled to statutory rights that give the tenant the ability to renew upon lease expiration, subject to certain exceptions.

With this transaction, Digital Realty has also granted Equinix an option to acquire one the company’s facilities in Paris and its associated business, for a purchase price of approximately $215m, before closing costs and prorations.

Equinix’s divesture of the eight assets is a condition of the European Commission’s (EC) approval of Equinix’s $3.6bn acquisition of Telecity, which closed in January 2016.

Digital Realty’s acquisition is subject to customary closing conditions, also including approval by the EC.

William Stein, Digital Realty’s CEO, said: "The acquisition of this portfolio of eight highly attractive facilities will enhance Digital Realty’s strong global presence and offer us even greater scale on the increasingly important European data centre landscape."

With the acquisition, Digital Realty will see its data centre portfolio increase to 140 sites worldwide (six in APAC, 112 in North America, and 30 in EMEA). This compares to 145 data centres owned by Equinix.

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