One of the biggest worldwide providers of cloud- and carrier-neutral data centers, colocation, and interconnection solutions, Digital Realty, along with Mitsubishi Corporation, have announced the creation of a new joint venture to facilitate the construction of two data centers in the Dallas metro area. These facilities are 100% pre-leased to a long-term S&P 100 investment grade client.
For an initial investment of around $200 million, Mitsubishi has obtained a 65% ownership stake in the partnership, with Digital Realty holding a 35% interest. Digital Realty will oversee the joint venture’s development and day-to-day operations in exchange for usual fees. The project’s first phase, expected to be completed and started in late 2024, would cost an estimated $100 million, of which each partner will pay its pro rata portion.
With a worldwide data center footprint consisting of more than 300 facilities located in more than fifty metropolitan areas across more than twenty-five countries and six continents, Digital Realty provides its clients with access to the connected communities. Over the course of the deal with Mitsubishi, Wells Fargo Securities acted as Digital Realty’s financial advisor.
$800M Investment
The first phase of the two data centers’ development, which started in the fourth quarter of 2022, is expected to provide 16 megawatts (MW) of initial data center capacity. Approximately $400 million is allocated for the first phase of these yield-on-cost initiatives. During the first lease period, the client has the option to extend the projects up to 48 MW of total IT load, which may raise the combined budget to $800 million based on current estimates of development costs.
“We are thrilled to grow our relationship with Mitsubishi,” said Greg Wright, Chief Investment Officer of Digital Realty. “This development joint venture supports our customer's data center requirements with a long-term, like-minded investor while leveraging the success of our long-standing Japanese partnership into the United States. Through the deal, Digital Realty's balance sheet is strengthened and more money is provided to carefully meet the longer-term capacity needs of our stakeholders.”
NRT12 Data Center Complex Opening in Japan
Another announcement made by Digital Realty was the opening of NRT12, the company's second data center at the NRT complex in Inzai City, Chiba Prefecture, Japan. In order to satisfy the rising need for data centers that are scalable, adaptable, and suitable for artificial intelligence in the Tokyo metropolitan region, NRT12 brings the overall capacity of the campus up to 73 megawatts (MW), adding 34 megawatts (MW) of critical IT infrastructure capacity.
Through its 50/50 joint venture in Japan with Mitsubishi Corporation, Digital Realty is increasing its capacity at the NRT campus. This expansion is being accomplished through MC Digital Realty (MCDR). NRT12 is especially built to serve demanding workloads such as artificial intelligence and generative artificial intelligence, machine learning, and virtual reality. It has the same strong and adaptable architecture as other data centers that have recently been created by MCDR in Japan, such as the adjacent NRT10 in Inzai and KIX13 in Osaka.
High-density power of up to 70 kilowatts (kW) per rack, innovative Air-Assisted Liquid Cooling (AALC) technologies, low-latency networks, and high-speed connectivity are some of the features that NRT12 comes equipped with. These features would allow it to meet the requirements of high-performance computing (HPC), machine learning, virtual reality, and augmented reality workloads, as well as workloads related to artificial intelligence and generative artificial intelligence.
In addition, the NRT campus provides a service known as Campus Connect, which is an interconnection service that enables clients to leverage infrastructure that spans numerous data centers on the campus as a single unit. This makes it possible for customers to interchange data in an efficient manner for artificial intelligence and digital transformation efforts. In addition, the modular architecture of the data centers makes it possible to dynamically scale the server settings in order to handle increasing AI installations.
