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Digital Realty Sets Foot in South Korea, Begins Construction
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Digital Realty (DLR - Free Report) recently announced the ground breaking for its first facility in South Korea. The data center — Digital Seoul 1 (ICN10) — which will accommodate 12 megawatts of IT load will be the first global, carrier-neutral facility in Korea following planned completion in 2021.
The facility is being constructed on a 22,000-square-foot land parcel within the Sangam Digital Media City in northwest Seoul. The development effort of Digital Realty reflects the noteworthy expansion of PlatformDIGITAL™ across Asia Pacific.
South Korea has emerged as one of the key digital hubs in the APAC region and applications like big data, artificial intelligence, 5G mobile services and the internet of things have been gaining momentum. Also, adoption of cloud services and digital transformation has increased amid the heightening reliance on technology in the wake of the coronavirus pandemic.
Digital Realty’s foray in South Korea is a strategic fit, with the nation becoming one of the fast growing data-center markets in the region. Apart from the latest development in Seoul, Digital Realty already enjoys a decent presence in the Asia-Pacific region, operating a network of data centers in Tokyo, Osaka, Hong Kong, Singapore, Sydney and Melbourne.
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 witnessing a boom market worldwide. Furthermore, 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. Apart from these, data centers are poised to benefit from the increased use of technology amid the coronavirus crisis. As such data-center REITs, including Digital Realty, Equinix, Inc. (EQIX - Free Report) , CyrusOne Inc. and CoreSite Realty Corporation (COR - Free Report) , will keep witnessing significant demand.
Amid this, Digital Realty is poised to bank on the healthy market fundamentals through accretive acquisitions, development and expansion efforts. During the first quarter, the company completed the acquisition of Interxion, a European provider of carrier and cloud-neutral colocation data-center services for a total consideration of $8.4 billion, including debt. The combined entity enjoys solid presence in major European metro areas, and its size and scale is likely to result in an efficient cost structure and strong EBITDA margins.
Digital Realty also recently announced its entry into the Mexico market in association with Ascenty, a Latin American data-center service provider and Digital Realty’s joint-venture (JV) company with Brookfield Infrastructure. Two new facilities will be built in the state of Queretaro, Mexico, with the initial phases slated for delivery in 2021.
Such encouraging factors have helped Digital Realty’s shares gain 19%, so far this year, as against the industry’s decline of 6.6%.
However, Digital Realty faces stiff competition from several data-center developers, owners and operators, many of which enjoy ownership of similar assets in locations same as the company. As the data-center market has the potential of further growth, these REITs remain under aggressive pricing pressure.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Digital Realty Sets Foot in South Korea, Begins Construction
Digital Realty (DLR - Free Report) recently announced the ground breaking for its first facility in South Korea. The data center — Digital Seoul 1 (ICN10) — which will accommodate 12 megawatts of IT load will be the first global, carrier-neutral facility in Korea following planned completion in 2021.
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/dlr_20200617.jpg)
The facility is being constructed on a 22,000-square-foot land parcel within the Sangam Digital Media City in northwest Seoul. The development effort of Digital Realty reflects the noteworthy expansion of PlatformDIGITAL™ across Asia Pacific.
South Korea has emerged as one of the key digital hubs in the APAC region and applications like big data, artificial intelligence, 5G mobile services and the internet of things have been gaining momentum. Also, adoption of cloud services and digital transformation has increased amid the heightening reliance on technology in the wake of the coronavirus pandemic.
Digital Realty’s foray in South Korea is a strategic fit, with the nation becoming one of the fast growing data-center markets in the region. Apart from the latest development in Seoul, Digital Realty already enjoys a decent presence in the Asia-Pacific region, operating a network of data centers in Tokyo, Osaka, Hong Kong, Singapore, Sydney and Melbourne.
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 witnessing a boom market worldwide. Furthermore, 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. Apart from these, data centers are poised to benefit from the increased use of technology amid the coronavirus crisis. As such data-center REITs, including Digital Realty, Equinix, Inc. (EQIX - Free Report) , CyrusOne Inc. and CoreSite Realty Corporation (COR - Free Report) , will keep witnessing significant demand.
Amid this, Digital Realty is poised to bank on the healthy market fundamentals through accretive acquisitions, development and expansion efforts. During the first quarter, the company completed the acquisition of Interxion, a European provider of carrier and cloud-neutral colocation data-center services for a total consideration of $8.4 billion, including debt. The combined entity enjoys solid presence in major European metro areas, and its size and scale is likely to result in an efficient cost structure and strong EBITDA margins.
Digital Realty also recently announced its entry into the Mexico market in association with Ascenty, a Latin American data-center service provider and Digital Realty’s joint-venture (JV) company with Brookfield Infrastructure. Two new facilities will be built in the state of Queretaro, Mexico, with the initial phases slated for delivery in 2021.
Such encouraging factors have helped Digital Realty’s shares gain 19%, so far this year, as against the industry’s decline of 6.6%.
However, Digital Realty faces stiff competition from several data-center developers, owners and operators, many of which enjoy ownership of similar assets in locations same as the company. As the data-center market has the potential of further growth, these REITs remain under aggressive pricing pressure.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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