European data center solutions provider Interxion, a Digital Realty (NYSE: DLR) company, has acquired the freehold to the land under its Hanauer Landstraße data center campus in Frankfurt. The site includes nine Interxion colocation data centers previously subject to leasehold agreements with approximately nine years of remaining lease term, along with Interxion’s German headquarters office as well as several buildings currently leased to other customers.
Interxion now owns the freehold to all 15 data centers on its Frankfurt campus. Separately, Interxion has reached an agreement to acquire an expansion parcel, formerly known as the Neckermann property, within approximately one kilometer of the Hanauer Landstraße campus. The expansion parcel totals 107,000 square meters. It will support the development of up to 180 megawatts of additional IT capacity and will be fully connected to the existing Frankfurt data center campus. The Neckermann property acquisition is expected to close in two stages, with final transfer of ownership in early 2021.
“Interxion Frankfurt is one of the leading cloud and connectivity hubs in the world, with direct access to numerous leading global cloud platforms and more than 700 carriers and Internet service providers,” said David Ruberg, Chief Executive Officer (CEO) of Interxion. “Acquiring the freehold to our existing campus as well as a sizable site for further expansion will enable customers to rapidly scale their digital transformation strategies by deploying critical infrastructure with a leading global data center provider and joining a thriving community of interest.”
The seller of the Hanauer Landstraße freehold was the open-ended real estate special alternative investment fund, BEOS Corporate Real Estate Fund Germany II, whose assets are managed by BEOS AG. BNP Paribas Real Estate served as financial advisor on the Hanauer Landstraße transaction, while White & Case served as legal advisor.
Build Out Data Center Capacity
The Hanauer Landstraße campus currently contains approximately 43,000 square meters on 6.5 hectares of land, 40% of which is leased to 21 customers with a weighted-average remaining lease term of approximately four years. At expiration, Interxion expects to redevelop the portion currently leased to third parties to build out additional data center capacity.
Interxion occupies more than half the campus across its nine data centers. Interxion employs “state-of-the-art” cooling techniques to support higher power density customer requirements while maintaining high energy efficiency, and 100% renewable energy is available to customers throughout the campus.
“These investments represent an important milestone on our global platform roadmap, enabling customers’ digital transformation strategies while demonstrating our commitment to supporting their future growth on PlatformDIGITAL,” said A. William Stein, Chief Executive Officer (CEO) of Digital Realty. “We believe we are creating significant value by combining the leasehold and freehold positions on one of the most highly connected campuses in Europe, while the assemblage of adjacent expansion capacity provides long-term certainty for the coverage, capacity and connectivity requirements to support our customers’ digital ambitions.”