According to foreign media reports, Digital Realty and Mitsubishi Corp. have formed a joint venture to support the development of two data centers in the Dallas metropolitan area, which have been 100% pre leased to S&P 100 investment grade clients.
Mitsubishi acquired 65% equity of the joint venture with an initial investment of approximately $200 million. In contrast, Digital Realty holds a 35% stake and will manage the development and daily operations of the joint venture, for which regular fees will be charged.
Each partner will provide funding proportionally for the estimated development cost of $100 million remaining in the first phase of the project, which is scheduled to be completed by the end of 2024.
The construction of these two data centers began in the fourth quarter of 2022, with the first phase planned to provide an initial data center capacity of 16 megawatts (MW). The budget for the first phase is approximately $400 million.
According to Digital Realty and Mitsubishi, customers can expand the project to a total IT load of 48 megawatts during the initial lease term, which may increase the total budget to $800 million based on current development cost estimates.
Greg Wright, Chief Investment Officer of Digital Realty, stated, “The joint venture leverages our established Japanese partnership in the United States while working with like-minded long-term investors to support our clients’ data center needs. This transaction enhances Digital Realty’s balance sheet and provides incremental capital to prudently support our stakeholders’ long-term capacity needs.”