Digital Realty Trust Buys Three Data Centres In London

London continues to live up to its billing as one of the biggest data centre markets in Europe after Digital Realty Trust made a billion dollar acquisition of three data centre locations.

The move has not come cheap as the three data centres (located in Woking, Watford and Croydon) have cost Digital Realty a whooping £715.9m ($1.1bn). To finance the deal, Digital Realty used a combination of cash, credit and sale of shares.

Costly deal

The acquisition of the three data centres from Sentrum is referred to by the data centre wholesale giant as ‘the Sentrum Portfolio’. The deal will give Digital Realty an additional 761,000 square feet in data centre space to lease out to its customers.

“We believe the addition of these high quality, mission critical facilities to our operating portfolio will enable us to serve a wide variety of customers seeking institutional quality data center space in London, a highly strategic global data center market,” said Michael F. Foust, CEO of Digital Realty.

“The portfolio is approximately 80 percent leased to a diverse roster of 21 tenants, including leading multinational financial institutions and global network providers, with a weighted average remaining lease term of approximately eight years,” said Scott Peterson, chief acquisitions officer for Digital Realty. “In addition to the stable in-place income, there is a significant value-add opportunity to lease the balance of the portfolio’s available space.”

Speaking to TechWeekEurope, a Digital Realty spokesperson could not provide any additional comment at the time of writing.

London Hotspot

Digital Realty currently operates data centres in 31 countries across the globe, boasting approximately 19.1 million square feet of space in total, which it leases out to other companies.

The London acquisitions will boost the data centre capacity of the company, which already has a 96,000 sq ft facility located 20 miles south of London.

In September 2010, Tariff Consultancy Ltd reported that London was still the largest European data centre market. It found that London’s ‘interconnected ecosystem’ was one of the main attractions, despite the high cost of real estate within the M25 and difficulties in securing availability of the necessary power supplies.

Many London-based data centres are now confronting more and more issues associated with power, cooling and space, thanks to the new generation of high-density equipment. This has forced many companies to look at renewable energy sources.

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