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Digital Realty has agreed to acquire Blackstone's stake in three data centres in Northern Virginia through a USD 3.5 billion cash-and-stock transaction, strengthening its presence in the world's largest data centre market. The acquisition comes as demand for hyperscale facilities continues to grow due to artificial intelligence (AI) and cloud computing. The deal covers three fully leased facilities with a combined IT capacity of 288 megawatts and is expected to support Digital Realty's earnings growth as the projects become operational over the next two years. The companies will also continue their partnership on other data centre investments.
Digital Realty has agreed to acquire a larger ownership stake in three data centres in Northern Virginia from Blackstone-managed funds in a USD 3.5 billion cash-and-stock deal, expanding its presence in one of the world's fastest-growing data centre markets. The transaction, announced earlier this week, was expected to close on Tuesday, subject to customary conditions.
Under the agreement, Digital Realty will pay USD 1.2 billion in cash and issue USD 2.3 billion worth of its shares to Blackstone. The transaction values the three data centre assets at approximately USD 7.8 billion, including debt and the remaining capital expenditure required to complete their development.
As part of the acquisition, Digital Realty will purchase Blackstone's 80% interest in two 96-megawatt data centres in Manassas, Virginia, along with a 50% interest in another 96-megawatt facility in Sterling, Virginia. Together, the three fully leased hyperscale facilities provide a total IT capacity of 288 megawatts and are leased to three investment-grade customers under long-term agreements.
The acquisition further strengthens Digital Realty's position in Northern Virginia, widely recognised as the world's largest data centre market. Demand for data centre capacity has continued to rise as companies invest heavily in AI infrastructure and cloud computing, making the region a key destination for hyperscale developments.
Digital Realty's Chief Financial Officer Matt Mercier said the transaction is expected to increase the company's Core Funds From Operations (Core FFO) per share during 2027 and 2028 as development is completed and rental income begins. Two of the facilities are expected to stabilise during the first half of 2027, while the third is projected to reach stabilisation in the first half of 2028.
The company also said it has built a strong partnership with Blackstone through the joint development of these assets and will continue working together on other data centre investments across Northern Virginia, Paris and Frankfurt. Chief Investment Officer Greg Wright stated that the latest transaction marks the next phase of the relationship by increasing Digital Realty's ownership in a portfolio of fully leased, high-quality hyperscale assets while supporting its long-term growth pipeline.
Following the announcement, Digital Realty's shares fell about 2.4% in extended trading. The companies, however, maintained that the deal strengthens their long-term strategy as demand for digital infrastructure continues to grow globally.
Source Reuters
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