Digital Realty expands power, African hubs and capital access

Digital Realty is repositioning its infrastructure and capital strategy through three simultaneous transactions. The moves target power capacity in a new U.S. market, deeper control of Africa’s largest carrier-neutral data center platform, and expanded access to private capital. The deals reflect the pressures AI workloads place on energy access, geographic reach, and financing flexibility in the data center sector.

The company is purchasing 1,440 acres at Astra Enterprise Park near Kansas City for approximately $475 million. It is also increasing its stake in Teraco to 77% by acquiring a 16% minority position for roughly $650 million, primarily through stock. Additionally, Digital Realty plans to acquire Columbia Capital, an investment firm focused on digital infrastructure, for about $485 million, largely via shares. The Teraco and Columbia Capital transactions are expected to close in the second half of 2026, subject to regulatory and shareholder approvals.

Power as the new land title

The Kansas City acquisition signals a shift in how data center operators evaluate real estate. The site’s appeal lies not in its acreage but in its power agreement with the local utility, which commits to delivering 600 megawatts by early 2028, with a pathway to two gigawatts at full buildout. This scale is increasingly necessary to support hyperscale cloud and AI training clusters, but it also introduces risks tied to grid planning, permitting, and local opposition.

Kansas City has emerged as a secondary market with advantages over more congested hubs like Northern Virginia. Its central U.S. location, available land, and utility capacity make it attractive for disaster recovery and large enterprise outsourcing. However, the arrival of hyperscale capital is likely to intensify competition for power, prompting closer scrutiny from utilities and local regulators. For developers, the site offers optionality—it can serve cloud regions, AI workloads, or enterprise colocation—but the timeline for power delivery remains a critical dependency.

African interconnection and execution risk

Digital Realty’s increased stake in Teraco underscores the strategic value of dense interconnection hubs. Teraco operates carrier-neutral data centers across Africa, where cloud adoption, subsea cable expansion, and data sovereignty requirements are driving demand. The 77% ownership position gives Digital Realty greater exposure to Africa’s growth but also ties it more closely to the region’s challenges, including power reliability, currency volatility, and regulatory fragmentation.

The transaction reflects a broader trend: global operators are prioritizing control of scarce, network-dense assets over easily replicable shell capacity. While a warehouse with power can be built relatively quickly, a mature interconnection ecosystem takes years to develop. For hyperscalers and regional carriers, these hubs are becoming essential for reducing latency and complying with local data regulations.

Capital as infrastructure

The acquisition of Columbia Capital, an investment firm with $9 billion in fund commitments, is less about immediate capacity and more about long-term financing flexibility. Digital Realty aims to scale its Strategic Private Capital platform, which could provide additional funding avenues for AI-era development. The deal includes a multi-year lockup and performance-based earnouts, aligning Columbia’s incentives with Digital Realty’s growth.

However, integrating an asset manager into a public REIT-style platform introduces complexities. Institutional investors, including sovereign wealth funds and pension funds, will expect returns from AI infrastructure investments, even as valuations in the sector have risen. The success of the acquisition will depend on whether Columbia’s expertise can translate into efficient capital deployment without straining Digital Realty’s balance sheet.

The transactions are primarily funded through 6.3 million shares of common stock and operating partnership units at a weighted average price of $197.54 per share. While this approach conserves cash, it also dilutes existing shareholders, a trade-off that reflects the capital-intensive nature of AI-driven data center expansion.

Sources

Sources

• Hostingjournalist Com: Digital Realty Lines Up Power, Teraco Control, and Capital