Digital Realty Sells 10 Data Centers To Mapletree For $557 Million

Digital Realty ramped up its M&A charge in 2019 and this year the data center colocation giant says it is 'diversifying sources of equity capital' by selling 10 data centers to the Singapore-based investment firm.

Data center colocation giant Digital Realty sold 10 of its Powered Base Building data centers this week for $557 million with the goal of using the money to accelerate growth in other areas, potentially helping to fund its upcoming blockbuster $8.4 billion purchase of Interxion.

The San Francisco-based data center provider sold 10 centers located in North America to Singapore-based real-estate development and investment firm Mapletree. Digital Realty owns a massive data center portfolio of more than 210 data centers in 15 countries.

Digital Realty CEO A. William Stein said the sale “represents an important step towards our goal of self-funding our growth and diversifying our sources of equity capital, while setting the stage for accelerating growth as proceeds are redeployed into accretive investment opportunities.”

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The company, along with Equinix, is leading the massive M&A change in the data center space. Digital Realty rapidly expanded its data center footprint last year in Asia and Europe.

In October, in one of the largest data center acquisitions in years, Digital Realty unveiled its planned to purchase Interxion. Interxion’s European business consists of 53 facilities in 22 European countries and 13 metro areas including Paris, Frankfurt and Amsterdam, making it one of the most valuable data center providers in Europe.

Meanwhile, earlier this month Digital Realty expanded its board of directors by adding two industry veterans to help shape its future. Joining the board is Lt. Gen. VeraLinn Jamieson, former Director of the U.S. Air Force’s Intelligence Surveillance, Reconnaissance and Cyber Effects Operations, as well as Dr. Alexis Black Bjorlin, Broadcom’s senior vice president and general manager for its Optical Systems Division.

Digital Realty’s 10 Powered Base Building data centers are currently fully leased and are expected to generate 2020 net operating income of $37 million. Digital Realty will provide transitional property management services for the Powered Base Building portfolio for one year, according to the company. Digital Realty’s customizable Powered Base Buildings offer a “fit-out-ready” data center building on power and fiber-provisioned sites, with move-in ready shell, power and network resiliency and redundancies.

The company said it will likely do more business with Mapletree in the future. “We look forward to collaborating with Mapletree as joint venture partners and exploring additional opportunities together worldwide,” said Stein.