Brookfield and Digital Realty’s Ascenty JV has 17 assets including this Brazilian facility
Asset management giant Brookfield and data centre REIT Digital Realty have agreed to set up a joint venture to develop, own and operate data centres in India, gaining a foothold in one of the world’s largest and fastest-growing markets for data consumption.
Under the deal announced Wednesday, Brookfield Infrastructure LP and Digital Realty will form a 50:50 partnership operating under the brand name BAM Digital Realty. The effort brings the world’s largest data centre trust into India just three years after Digital Realty and Brookfield teamed up to acquire and expand a Latin America data centre platform that now stands at 250MW in capacity.
“India is a rapidly emerging data centre market and offers a bright future, with accelerating adoption of digital business models among a population that recognises the role of technology for future economic development,” said Digital Realty chief executive Bill Stein.
The tie-up between Brookfield, which has $609 billion in assets under management, and Digital Realty, which boasts a portfolio of 285 data centres worldwide, comes as India grows in importance with global operators seeking to serve the country’s growing tech sector as well as worldwide internet giants.
Robust Infrastructure
“We are pleased to further expand both our partnership with Digital Realty and our presence in India through this joint venture,” said Arpit Agrawal, managing director and head of India and Middle East at Brookfield Infrastructure. “Through the development of a high-quality, multi-city, India-focused data centre platform, we believe BAM Digital Realty is well positioned to play a meaningful role in addressing the large and growing data demand in the country and to offer a differentiated solution to customers.”
Digital Realty CEO Bill Stein
In addition to supporting the needs of global hyperscale service providers, BAM Digital Realty’s data centre campuses are intended to serve international and local enterprises by expanding DigitalRealty’s PlatformDigital system, which supports the evolving data, control and networking demands of global enterprises into India.
The India joint venture, which is expected to close in the second half of this year, comes after the partners were able to expand Ascenty, their Latin American joint venture, into a 17-facility network spanning Brazil and Chile following Digital Realty’s purchase of the company in 2018. Brookfield invested in the venture shortly thereafter, and Ascenty now has another 10 projects in development after expanding into Mexico last year.
BAM Digital Realty will expand Brookfield Infrastructure’s global portfolio, which has $23 billion in data transmission, distribution and storage assets globally, including 139,000 operational wireless telecom towers in India, with plans to acquire 36,000 more.
In more than a decade of investing in the world’s fifth-largest economy, Brookfield has amassed $20 billion in assets under management across infrastructure, renewable power, real estate and private equity.
The partnership marks a fresh start for Digital Realty in India after a 2019 agreement with local conglomerate Adani Group to explore the feasibility of developing data centres on the subcontinent failed to yield an operating joint venture.
The Texas-based REIT has a market cap in excess of $44 billion and operates facilities in 47 metro areas across 24 countries, including two data centres in Hong Kong, three in Singapore, three in Japan and one in South Korea.
Subcontinental Drift
As Asia’s data centre race heats up, investors are looking at India and its 1.4-billion-strong population as they assemble their platforms.
Last August, US-based Equinix announced the purchase of a two-facility data centre campus in Mumbai from Indian developer GPX Global Systems for $161 million. The complex hosts cloud service providers including Amazon Direct Connect, Google Cloud Dedicated Interconnect and Oracle Cloud Infrastructure FastConnect.
In the last six months, Singapore-based Princeton Digital Group began development of a 48MW multi-storey data centre campus in Navi Mumbai, while SGX-listed Ascendas India Trust said it would invest $162 million to develop and operate the first of two buildings planned for the REIT’s inaugural data centre campus, also in Navi Mumbai.
In February, the infrastructure investment arm of Adani Group appeared to reach a meeting of the minds at last, revealing a 50:50 joint venture with US-based EdgeConneX to build and operate data centres throughout India.
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