Realty Income is expected to invest up to $1.4bn (€1.23bn) for a 45% stake in a new US and European data centre venture established with Cloud Capital and an unnamed global institutional investor, seeded with an initial $6bn portfolio.
The trio have created the hyperscale data centre venture with the initial three assets in Northern Virginia.
NYSE-listed Realty Income, which expects to invest up to $1.4bn funded over time, will make an initial investment of approximately $700m expected to be funded between the second and third quarters of 2026.
Realty Income has also agreed to acquire similar interests in two assets under development upon completion in the coming years.
Cloud Capital will hold a minority investment in the portfolio, which will be managed and developed by global data centre firm CloudHQ.
Sumit Roy, president and CEO of Realty Income, said: “Today’s announcement affirms the strength of our business model and its ability to translate across sectors, including digital infrastructure. We are pleased to advance a scaled digital infrastructure platform while deepening our programmatic relationship with Cloud Capital, which is vertically integrated with CloudHQ, a best-in-class developer and operator.
“The combination of high-quality data centre assets leased to investment-grade tenants, long-duration triple-net leases and an attractive return profile reflects our disciplined approach to capital allocation and value creation.”
Hossein Fateh, founder and CEO of Cloud Capital and CloudHQ, said: “Hyperscale customers need infrastructure delivered at unprecedented scale and pace. Partnering with Realty Income and the global investor brings together the capital and the operating expertise to meet that demand and to extend our leadership in the sector.”
To read the latest IPE Real Assets magazine click here.
