Digital Realty Buys Land in Frankfurt to Grow in Europe
Digital Realty Trust, Inc. DLR revealed the acquisition of a six-acre land parcel in Frankfurt, Germany for $6 million. The acquisition is expected to substantially provide this data center real estate investment trust (REIT) with the opportunity to capitalize on the growing data center market in this part of the world.
The acquired property is situated about three miles to the west of downtown Frankfurt and estimated to support a 27-megawatt data center campus. It will consist of three buildings and aggregate around 340,000 square feet.
In terms of size, Frankfurt occupies the second position in the European region and comes right after London. Cloud adoption and evolving data sovereignty laws are significantly increasing demand for data centers in Frankfurt, pushing back market vacancies to record lows. Considered a key network interconnection center and the commercial and financial capital of Germany, Frankfurt has solid potential and therefore offers Digital Realty the scope to thrive.
The local entitlement process has already started and the company expects to break ground later on in 2016. Subject to market demand, the company has plans to come up with the first data center suite in the second half of 2017. Notably, the company already has 23 data centers in its European portfolio with facilities in London, Dublin, Amsterdam, Geneva and Paris.
Digital Realty Trust owns, acquires, repositions and manages technology-related real estate. Specifically, it provides data center, colocation and interconnection solutions which are critical for the day-to-day operations of the technology industry tenants.
Digital Realty has a Zacks Rank #2 (Buy). Investors interested in the REIT industry may consider the better-placed stocks of CoreSite Realty Corporation COR, Extra Space Storage Inc. EXR and Public Storage PSA. Each of these stocks holds the same Zacks Rank as Digital Realty.
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