Digital Realty, Mitsubishi Launch Data Center Joint Venture in Japan

Digital Realty Trust, a San Francisco-based global data center services giant, is launching a joint venture with Mitsubishi Corp., creating a data center provider in Japan and using the two companies’ existing properties in two Japanese markets as “seed assets,” the companies announced over the weekend.

The joint venture, called MC Digital Realty, is hoping to take advantage of a move by Japanese companies from predominantly on-premises corporate data centers into facilities operated by third-party service providers. The portion of corporate IT still housed in companies’ own data centers is much higher in Japan than it is in mature North American and European markets, according to the launch announcement.

The partnership will leverage Digital Realty’s expertise in data center design, construction, and operation, as well as its global customer base. Mitsubishi brings to the table its many years of experience in Japanese real estate and IT. Each partner will own a 50 percent stake in the joint venture, which will provide data center space, power, and interconnection services.

This is a second partnership between a major US-based data center provider and an Asian company announced this month. Last week, Dallas-based CyrusOne announced a $100 million investment in the Chinese data center services heavyweight GDS Holdings, acquiring an 8 percent stake in the company and striking an exclusive sales agreement, whereby each partner will sell the other’s services to existing and potential clients.

MC Digital Realty is being launched with 400 million Japanese yen, or about $3.5 million, of initial capital. The Digital Realty data center in Osaka and the Mitsubishi facility in Mitaka are worth about 40 billion yen, or $352 million, total.

The partners hope the venture will manage more than 200 billion yen, or $1.76 billion, in assets by 2022 by buying and building new data centers and expanding capacity on existing sites.