The Global datacentre provider has announced that it has entered into a definitive agreement to acquire a portfolio of eight carrier-neutral datacentres in Europe, five in London, two in Amsterdam and one in Frankfurt, from Equinix. The total purchase price is approximately US$874 million.
Equinix’s divesture of the eight assets is a condition of the European Commission’s approval of Equinix’s acquisition of Telecity, which closed in January 2016. As a condition of obtaining clearance from the European Commission, Equinix selected and agreed to divest the following facilities: TelecityGroup’s Bonnington House, Sovereign House, Meridian Gate and Oliver’s Yard datacentres and Equinix’s West Drayton datacentre in London; TelecityGroup’s Science Park and Amstel Business Park I in Amsterdam; and TelecityGroup’s Lyonerstrasse datacentre in Frankfurt.
Digital Realty will acquire a fee interest in one datacentre in Amsterdam and will acquire leasehold interests in the other seven datacentres, 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.
In connection with this transaction, Digital Realty has granted Equinix an option to acquire the company’s facility at 114 rue Ambroise Croizat in Paris and its associated business, for a purchase price of approximately US$215 million. The option remains subject to certain conditions, including confirmatory due diligence, any mandatory governmental or local authority approval, and any required employee consultation processes. Digital Realty cannot assure when, or if, the option will be exercised.
“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 datacentre landscape,” said A. William Stein, Digital Realty’s Chief Executive Officer. “We have made several recent strategic investments in Europe, and this new portfolio – which is concentrated in three of the most strategically important datacentre and interconnection hubs in Europe – will immediately bring on board a large, diversified customer base and will also provide significant opportunities to grow and extend our footprint across the continent for years to come.”
The portfolio of eight facilities contains approximately 213,000 net sellable sq ft and 24.4 megawatts of IT load, serving a large base of over 650 blue-chip clients. These clients are predominantly concentrated in the network, cloud and IT services, content and digital media and financial services verticals, and are expected to be highly complementary to Digital Realty’s target customer verticals. The properties are 72% utilized, based on available power.
The portfolio also provides substantial available capacity, with approximately 6.9 megawatts of fully-installed power and 62,700 net sellable sq ft immediately available for lease, as of March 31, 2016. Entitled expansions in the London and Amsterdam facilities could add up to another 14.9 megawatts of power capacity and 88,900 net sellable sq ft to support future growth.
The European portfolio acquisition is expected to close in the second half of 2016 and is subject to customary closing conditions, including approval by the European Commission, as well as completion of the works council consultation process in the Netherlands.
