Digital Core REIT Sells Three US Data Center Stakes, Expands in Asia

Digital Core REIT is selling stakes in three North American data centers to Digital Realty for about $316 million and using the proceeds to expand in Asia. It will acquire stakes in two facilities in Singapore and Osaka for about $176 million, while using around $117 million to repay debt and up to $20 million for unit buybacks.

“With this transaction, we expect to tactically enhance Digital Core REIT’s portfolio mix, leverage and distribution per unit, in an effort to better position the REIT for the unprecedented opportunity we see ahead,” said Digital Realty chief investment officer, Gregory S. Wright. “Digital Core REIT was formed to capitalize on the enormous growth potential within the data center sector, which is now materializing in the midst of the sector’s ongoing investment cycle.

John J. Stewart, CEO of Digital Core REIT Management, said the deal will mark the REIT’s entry into Singapore while expanding its presence in Japan and supporting its broader Asia-Pacific growth strategy. Digital Core REIT was established by Digital Realty in 2021 to hold stabilized data center assets. Its initial portfolio included 10 facilities across the US and Canada, totaling more than 1.2 million square feet and 49MW. The 8217 Linton Hall Road facility in Virginia spans 207,000 square feet and has 9MW of capacity. The site recently secured a 10-year lease with an unnamed global cloud provider.

The 371 Gough Road facility in Toronto spans 120,040 square feet with 6.75MW of capacity and operates as Digital Realty’s YYZ10 data center. Digital Realty’s LAX11 facility in El Segundo, California, covers 113,606 square feet and was previously leased to Cyxtera before its bankruptcy. In Singapore, SIN12 offers 50MW across 365,000 square feet and is 94% occupied. Digital Osaka 3 in Japan provides 19.9MW across 193,535 square feet and is fully leased.