Digital Realty and Blackstone Inc. announced that Blackstone-affiliated funds led by Infrastructure, Real Estate and Tactical Opportunities have agreed to establish a joint venture with Digital Realty to develop four hyperscale data center campuses across three metro areas on two continents. The developments are expected to support approximately 500 megawatts (MW) of total IT load upon full build out of all campuses. Blackstone will acquire an 80% ownership interest in the joint venture for approximately $700 million of initial capital contributions, while Digital Realty will maintain a 20% interest.
Subsequent to closing, the joint venture parties will fund their pro rata share of the remaining development costs. Digital Realty will manage the development and day-to-day operations of the joint venture, for which it will receive customary fees. The four hyperscale data center campuses are located in Frankfurt, Paris and Northern Virginia and have a total estimated development cost of approximately $7 billion over the course of the next several years.
The campuses are planned to support the construction of 10 data centers with approximately 500 MW of potential IT load capacity. Of this capacity, 46 MW is under construction and is 33% pre-leased. The remaining land capacity is in varying phases of pre-construction and is expected to be developed to meet customer demand.
Approximately 20% of the total potential IT load capacity is expected to be delivered through 2025, with the balance expected to be delivered in 2026 and beyond. The joint venture is scheduled to close in two stages over the course of the first half of 2024, subject to certain regulatory and other approvals, as well as other customary closing conditions.