FX.co ★ Digital Realty, Mitsubishi In JV To Support Development Of Two Data Centers In Dallas Metro Area

Digital Realty Trust, Inc. and Mitsubishi Corp. have recently established a joint venture to support the development of two data centers in the Dallas metro area. These centers are entirely pre-leased to a top-rated S&P 100 customer on a long-term basis.

Mitsubishi has bought a 65% equity stake in the venture, amounting to an initial investment of approximately $200 million. Meanwhile, Digital Realty possesses a 35% stake and will oversee the development and daily operations of the joint venture, earning them standard fees.

Each partner is expected to finance its proportional share of the remaining estimated $100 million development cost for the project's first phase, set for completion by the end of 2024.

Construction of these two data centers began in the final quarter of 2022, and the first phase is expected to provide 16 megawatts of initial data center capacity. The first phase's budget, for these yield-on-cost developments, is projected at roughly $400 million.

The customer retains the option to increase the projects' capacity up to 48 MW of total IT load during the principal lease period, potentially expanding the combined budget to $800 million, following current development cost projections.