Joint venture to combine Mitsubishi's global brand recognition and local enterprise expertise with Digital Realty's global data center platform and industry-leading operational track record
Digital Realty (NYSE: DLR), a leading global provider of data centre, colocation and interconnection solutions, announced today it has entered into a 50/50 joint venture with Mitsubishi Corporation to provide data centre solutions in Japan. The new joint venture will benefit from Mitsubishi Corporation's local enterprise expertise and established data center presence in Tokyo, as well as Digital Realty's global client base and industry-leading track record of data centre operational excellence.
The joint venture will operate under the name MC Digital Realty. Mitsubishi Corporation will contribute two existing data centre facilities in the western Tokyo suburb of Mitaka, while Digital Realty will contribute its recently completed data centre development project in Osaka. The three seed assets are collectively valued at approximately 40 billion Japanese Yen, or approximately $350 million. The joint venture aims to build a meaningful platform to serve the broader Japanese market, with the potential to significantly expand its scope over the next several years.
"We are delighted to be partnering with an institution of Mitsubishi Corporation's global prestige and local expertise, and to be establishing a presence in Tokyo," said A. William Stein, Digital Realty's Chief Executive Officer. "Japan is a highly strategic country for Digital Realty's global data centre platform, and this relationship with Mitsubishi Corporation represents a major step towards strengthening our presence in Japan."
Digital Realty announced the opening of Digital Osaka 1, its first data centre project in Japan, earlier this year. Digital Osaka 1 spans approximately 93,000 square feet, provides 7.6 megawatts of IT capacity, and was fully leased prior to the official opening. Concurrent with the opening of Digital Osaka 1, Digital Realty also announced the acquisition of an adjacent land parcel for the future development of a connected campus in Osaka, which will support up to 27 megawatts of additional IT capacity upon completion.
"Japan is a developed market, with a highly advanced technology sector that is expected to experience rapid growth over the next several years, yet the local data centre market remains highly fragmented with a shortage of institutional quality data centre capacity," said Chris Kenney, Digital Realty's Senior Vice President, International. "We see tremendous opportunity for growth in the Asia Pacific region over the next several years, and we expect the MC Digital Realty joint venture will significantly enhance our ability to meet the growing data centre demands of the Japanese market."
Digital Realty offers a full range of global data centre, colocation and interconnection solutions, and currently owns and operates 157 properties across 33 global metropolitan areas. In the Asia Pacific region, Digital Realty operates a network of industry-leading data centres located in Singapore, Hong Kong, Osaka, Melbourne and Sydney.
About Digital Realty
Digital Realty supports the data centre, colocation and interconnection strategies of more than 2,300 firms across its secure, network-rich portfolio of data centres located throughout North America, Europe, Asia and Australia. Digital Realty's clients include domestic and international companies of all sizes, ranging from financial services, cloud and information technology services, to manufacturing, energy, gaming, life sciences and consumer products. For more information visit www.digitalrealty.asia , follow us on Twitter at @DigitalAPAC or see our blog at https://apac.digitalrealty.com .
About Mitsubishi Corporation
Mitsubishi Corporation (MC) is a global integrated business enterprise that develops and operates businesses across virtually every industry including industrial finance, energy, metals, machinery, chemicals, and daily living essentials.
MC's current activities have expanded far beyond its traditional trading operations to include investments and business management in diverse fields including natural resources development, manufacturing of industrial goods, retail, new energy, infrastructure, finance and new technology-related businesses.
With over 200 offices and subsidiaries in some 90 countries worldwide and a network of over 1,200 group companies, MC employs a multinational workforce of more than 68,000 people.
Safe Harbor Statement
This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to the joint venture announcement between Digital Realty and Mitsubishi Corporation. These risks and uncertainties include, among others, the following: the impact of current global economic, credit and market conditions; current local economic conditions in the metropolitan areas in which we operate; decreases in information technology spending, including as a result of economic slowdowns or recession; adverse economic or real estate developments in our industry or the industry sectors that we sell to (including risks relating to decreasing real estate valuations and impairment charges); our dependence upon significant tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; defaults on or non-renewal of leases by tenants; our failure to obtain necessary debt and equity financing; risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements; financial market fluctuations; changes in foreign currency exchange rates; our inability to manage our growth effectively; difficulty acquiring or operating properties in foreign jurisdictions; our failure to successfully integrate and operate acquired or developed properties or businesses; the suitability of our properties and data center infrastructure, delays or disruptions in connectivity, failure of our physical and information security infrastructure or services or availability of power; risks related to joint venture investments, including as a result of our lack of control of such investments; delays or unexpected costs in development of properties; decreased rental rates, increased operating costs or increased vacancy rates; increased competition or available supply of data center space; our inability to successfully develop and lease new properties and development space; difficulties in identifying properties to acquire and completing acquisitions; our inability to acquire off-market properties; the impact of the United Kingdom's referendum on withdrawal from the European Union on global financial markets and our business; our inability to comply with the rules and regulations applicable to reporting companies; our failure to maintain our status as a REIT; possible adverse changes to tax laws; restrictions on our ability to engage in certain business activities; environmental uncertainties and risks related to natural disasters; losses in excess of our insurance coverage; changes in foreign laws and regulations, including those related to taxation and real estate ownership and operation; and changes in local, state and federal regulatory requirements, including changes in real estate and zoning laws and increases in real property tax rates. For a further list and description of such risks and uncertainties, see the reports and other filings by Digital Realty with the U.S. Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended December 31, 2016 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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