Digital Realty Goes Global With Build-to-Suit

Digital Realty Trust has gone global with its build-to-suit data center business. The data center developer has formed an alliance with Germany's M+W Group, an international engineering and construction company, to offer customers a single source for custom enterprise data center projects in Europe and Asia.

The initiative is Digital Realty's second partnership in the build-to-suit space, following on last year's agreement with KDC to offer build-to-suit data centers for corporate customers in the U.S.  The alliance with M+W Group' creates a similar model for Europe and Asia.

The M&W alliance continues a process in which Digital Realty has built out its product suite to address all corners of the data center market, and is now expanding its footprint to encompass all major regional markets.

"For the first time, customers have a one-stop shop focused on their build-to-suit data centre projects," said Michael Foust, Chief Executive Officer at Digital Realty Trust (NYSE:DLR). "M+W Group and Digital Realty Trust together form the single provider for custom build-to-suit datacentres for enterprise customers without financing contingency risk."

"The timing is ideal for the emergence of an international developer that can finance and develop build-to-suit data centres to meet the location and technical needs of the enterprise customer," said Jurgen Wild, CEO of M+W Group. "Digital Realty Trust is the world's leading wholesale data centre provider and M+W Group sets the standards in international build-to-suit high-tech facilities. At a time when most companies are having difficulty obtaining financing for major construction projects, our alliance provides a simple, best-in-class process for the delivery of a custom data centre facility."

Build-to-suit projects are less risky than wholesale multi-tenant data center projects, which are typically built either on a speculative basis or based on a commitment from an anchor customer. In either scenario, the project goes forward before it is entirely leased.

Foust said the partnership also allows Digital Realty to take advantage of its financial strength. "Digital Realty Trust is able to provide customers with a lease structure for the bespoke data centre, including the mechanical and electrical plant, offering a simple financial model that reduces the total cost of ownership," he said.

M+W Group GmbH is the holding company with headquarters in Stuttgart, Germany. In 2010 M+W Group generated according to preliminary figures an order intake of 2.1 billion euros and revenues of nearly 1.8 billion euros with a workforce of approximately 6,000 employees. M+W Group is owned by the Austrian Stumpf Group that is globally successful in the areas of high-tech engineering, renewable energy, real estate and technology investments.