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Digital Realty Taps Malaysia for Expansion Through CSF Advisers Buyout

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Key Takeaways

  • DLR gains immediate presence in Malaysia with TelcoHub 1, a live data center in a key regional hub.
  • Digital Realty secures future growth with adjacent land supporting up to 14 MW of additional IT load.
  • DLR expands PlatformDIGITAL in Southeast Asia, enhancing interconnection and regional customer reach.

In a major boost to its portfolio, Digital Realty (DLR - Free Report) recently announced plans to enter Malaysia through an agreed-upon arrangement to acquire CSF Advisers. The entity owns TelcoHub 1 data center in Cyberjaya, one of the most established data center hubs in the Greater Kuala Lumpur area.

Known as Malaysia’s largest dark fiber interconnected hubs, with more than 6,000 crores of regional and long-haul fiber landing, TelcoHub 1 is an operational 1.5 megawatt data center. DLR has further committed to the acquisition of adjacent land with the ability to support 14 megawatts of IT load to meet future capacity expansion needs.

Digital Realty plans to integrate the Malaysian campus into PlatformDIGITAL, its global data center platform and introduce its interconnection and orchestration solution, ServiceFabric. This will provide customers with a consistent, secure and interconnected environment for their infrastructure deployment, building global connectivity and enhanced flexibility.

The acquisition is expected to be completed in the first half of 2026, subject to customary closing conditions. Upon the closing of the acquisition, the local leadership team and more than 40 skilled professionals are set to come on board at Digital Realty. With their experience and expertise, they will support CSF’s diverse customer base.

Wrapping Up on DLR

The Malaysian market is embarking on a sustained scale-up phase for digital infrastructure, with its data center capacity anticipated to rise from 1.26 gigawatts in 2025 to 2.53 gigawatts in 2030. The growing demand for cloud services, AI acceleration, robust connectivity infrastructure and supportive government policies are paving the way for continued expansion.

DLR’s foray into Malaysian markets will extend its Southeast Asia Platform, alongside Singapore and Jakarta, to tap the region’s growing digital infrastructure demands. The move underpins the data center REIT’s long-term investment commitment in the country, marking it as a credible location for interconnected, secure and sovereign-ready digital infrastructure serving Southeast Asia.

Over the past month, shares of this Zacks Rank #2 (Buy) REIT have risen 6.6% compared with the industry’s growth of 4.8%.

Analysts also seem bullish on this stock, with the Zacks Consensus Estimate for 2025 FFO per share having been revised northward by 1.9% to $7.35 over the past two months. The estimate for 2026 has been moved up by 2.2% to $7.91 over the same period.

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Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Prologis Inc. (PLD - Free Report) and Lamar Advertising (LAMR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for PLD’s 2025 and 2026 FFO per share is pinned at $5.80 and $6.08, respectively. This calls for year-over-year growth of 4.3% for 2025 and 4.7% for 2026.

The Zacks Consensus Estimate for LAMR’s 2025 and 2026 FFO per share is pegged at $8.19 and $8.83, respectively. This implies year-over-year growth of 2.5% for 2025 and 7.8% for 2026.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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