Interconnection and data-center real estate investment trust (REIT) Equinix, Inc. (EQIX - Free Report) announced that it has formed a joint venture (JV) with Oman Telecommunications Company — also known as Omantel — to work on a new network-dense data center in Barka, located near Muscat, the capital of Oman.
The new Equinix International Business Exchange (IBX) data center will provide better access to the growing global subsea cable network to the company’s Middle East customers and create a regional interconnection hub. It will mark Oman’s first world-class, carrier neutral data-center hub that will enable carriers, content providers and cloud providers to share 18,600 square feet of IT infrastructure.
At full built, the facility will provide nearly 750 cabinets. It will be developed in three phases, and the first phase is expected to open by 2Q19 with 250 cabinets. The IBX center will be operated by Equinix.
Notably, both companies will provide equity funding amounting to $10 million, representing 50% shareholding each. Further, the JV will assume additional debt to raise funds.
Specifically, termination of the subsea cables and connectivity to strategic cable landing stations (CLS) will take place directly into the facility. This will provide direct access, result in cost savings and higher performance and security for the company’s customers. Also, customers in the GCC and MENA regions stand to gain from the new data center by receiving dual access to content and cloud providers from other data centers in the region.
According to Eric Schwartz, president, EMEA, Equinix, “In the digital age, companies need to reach everywhere, interconnect everyone and integrate everything, and they need to do it out at the digital edge, where commerce, population centers and digital ecosystems meet. Our joint venture with Omantel will do exactly that."
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 like Equinix and Digital Realty (DLR - Free Report) are experiencing a boom market. Amid these, strategic measures such as data-center expansion, partnerships and buyouts assist the company to cater to the fast-increasing requirement of subsea cables.
Currently, Equinix has a Zacks Rank #3 (Buy).
Moreover, the stock has gained 9.9% over the past three months, versus the industry’s rally of 9.7%.
Stocks Worth a Look
A couple of better-ranked stocks from the same space are PS Business Parks (PSB - Free Report) and Columbia Property Trust, Inc. (CXP - Free Report) . Both stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PS Business Parks’ Zacks Consensus Estimate for 2018 funds from operations (FFO) per share has been revised 0.3% upward over the past month. Its shares have returned 15.1% in the past three months.
Columbia Property Trust’s FFO per share estimates for 2018 remained unchanged at $1.46 in the past month. The stock has gained 12.1% in three months’ time.
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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