Digital Realty (DLR) expands with data centers in Toronto and Marseille



Digital Real Estate Trust DLR announced new data centers in downtown Toronto, Canada and Marseille, France, with the goal of strengthening its presence around the world. The move comes as the company expands its global data center platform – PlatformDIGITAL® – to capitalize on favorable trends as industries accelerate digital transformations globally.

In particular, in downtown Toronto, Digital Realty is opening 800 kW and 6,900 sq. Ft. Of new colocation facilities. Named YYZ12 data center, this facility is the company’s third data center in the Greater Toronto Area and will be fully interconnected with redundant dark fiber paths to Digital Realty’s TOR1 data center in Vaughan, management said. This would allow the deployment of network hubs on PlatformDIGITAL® to develop digital activity.

Notably, Toronto is a critical data attraction hub for the financial services, banking, and insurance industries and, according to the DGX â„¢ Data Gravity Index â„¢, the city is in the top 10 metros in terms of Data severity intensity growth for these industries through 2024. It makes sense for Digital Realty to expand its platform in the region.

In addition, the company has innovated on its fourth data exchange center in the key interconnection hub of the southern port city of Marseille in France. The new site named MRS4 will offer a capacity of 13.6 MW as well as direct access to 14 submarine cables landing in Marseille. As a result, it will extend the global reach of PlatformDIGITAL® with low latency connectivity options between the Americas, Europe, Africa and Asia.

With the growth of cloud computing, the Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure; data center REITs are experiencing a booming market. In addition, the estimated growth rates for the artificial intelligence, autonomous vehicles and virtual / augmented reality markets will remain robust over the next five to six years.

Demand is strong in the leading data center markets and, despite a high occupancy rate, the leading markets are absorbing new construction at a faster rate. These are expected to fuel the demand for data centers.

In addition, data centers are expected to benefit from the growing reliance on technology in the wake of the coronavirus pandemic. So owners of data centers like Digital Realty, Equinix, Inc. EQIX, CyrusOne Inc. CONE and CoreSite Realty Corporation COR will continue to witness significant demand.

Capitalizing on these factors and supported by a healthy balance sheet, Digital Realty is expanding its portfolio through accretive acquisition and development efforts, thereby strengthening the company’s presence outside of the United States. However, aggressive pricing pressure is expected to prevail in the coming period in the competitive landscape.

Digital Realty currently carries a Zacks # 3 (Hold) rank. Over the past three months, the company’s shares have gained 12.9%, outperforming the industry rally by 12.2%. The full list of current Zacks # 1 Rank (Strong Buy) stocks here.

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