Back to top

Image: Bigstock

Digital Realty (DLR) Grows with Toronto & Marseille Data Centers

Read MoreHide Full Article

Digital Realty Trust (DLR - Free Report) has announced new data centers in downtown Toronto, Canada and Marseille, France, in a bid to boost its presence across the globe. The move comes as the company builds up its global data-center platform — PlatformDIGITAL® — to leverage on the favorable trends as industries speed up digital transformations globally.

Particularly, in downtown Toronto, Digital Realty is opening up 800kw and 6,900 ft² of new colocation facilities. Named YYZ12 data center, this facility marks the company’s third data center in Greater Toronto and will be fully interconnected with redundant dark fiber paths to Digital Realty's TOR1 data center in Vaughan, management noted. It would enable the deployment of network hubs on PlatformDIGITAL® for scaling digital business.

Notably, Toronto is a vital hub of data attraction for financial services, banking and the insurance industries and per the Data Gravity Index DGX™, the city is in the top 10 metros in terms of growth in data gravity intensity for these sectors through 2024. This makes sense for Digital Realty to expand its platform in the region.

Moreover, the company broke ground on its fourth center of data exchange in the key interconnection hub in the southern port city of Marseille in France. The new site named as MRS4 will provide 13.6 MW of capacity 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 growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure; data-center REITs are seeing a boom market. Also, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five to six years.

Demand is strong in top-tier data-center markets and despite enjoying high occupancy, the top-tier markets are absorbing new construction at a faster pace. These are anticipated to fuel demand for data centers.

In addition, data centers are poised to benefit from the heightening reliance on technology in the wake of the coronavirus pandemic. Thus, data-center landlords like Digital Realty, Equinix, Inc. (EQIX - Free Report) , CyrusOne Inc. (CONE - Free Report) and CoreSite Realty Corporation (COR - Free Report) will keep witnessing significant demand.

Banking on such factors and backed by a healthy balance sheet, Digital Realty is expanding its portfolio on accretive acquisition and development efforts, growing the company’s presence outside America. However, aggressive pricing pressure is likely to prevail in the upcoming period amid the competitive landscape.

Digital Realty currently carries a Zacks Rank #3 (Hold). In the past three months, the company’s shares have gained 12.9%, outperforming the industry’s rally of 12.2%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company, which shot up +143.0% in a little more than 9 months, and Nvidia, which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>