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Digital Realty (DLR), Brookfield Infrastructure Close JV in India

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Digital Realty (DLR - Free Report) has announced the completion of its Indian joint venture (JV) – BAM Digital Realty – with Brookfield Infrastructure L.P. (BIP - Free Report) . The JV, announced this July, has received all the necessary regulatory approvals.

The move will facilitate significant expansion of Digital Realty's premier global data-center platform, PlatformDIGITAL, which supports the evolving data, control and networking demands of global service providers as well as global and local enterprises.

With a population of more than 1.4 billion, India is the fifth largest economy in the world in terms of GDP. Also, the country enjoys a fast-emerging data-center market and rapid adoption of digital business models.

Additionally, backed by increasing data consumption, digital transformation of the economy and the onset of 5G and data localization trends, India enjoys a high demand for data centers. This makes sense for Digital Realty to expand its platform in the region.

The expansion in the Indian market will enable customers to rapidly scale digital transformation. The data centers will leverage on Digital Realty's energy-efficient data-center design and operating procedures, and a highly repeatable Pervasive Data Center Architecture approach for the new digital workplace.

Brookfield Infrastructure’s portfolio consists of 139,000 operational telecom wireless towers in India, which it intends to expand to 175,000 in the coming days. Hence, the JV will be beneficial to both entities.

Further, the JV complements Digital Realty’s existing partnership with Brookfield Infrastructure. In June 2020, they set foot in the Mexico market through the Ascenty platform.

Data centers are poised to benefit from the heightening reliance on technology that has been fueled by the pandemic. This, in turn, has opened up growth opportunities for data-center providers like Digital Realty, Equinix, Inc. (EQIX - Free Report) and CoreSite Realty Corporation (COR - Free Report) .

However, the cut-throat competition in the industry, leading to aggressive pricing pressure, is a concern.

Digital Realty’s shares have appreciated 11.8%, in the past six months, underperforming the industry’s rally of 14.7%.

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Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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