Digital Realty’s Plans for Kansas, Teraco & Columbia Capital

Digital Realty is executing three transactions to expand its hyperscale development capacity, grow its colocation portfolio and scale its investment platform. 

The global cloud and carrier-neutral data centre provider is purchasing a powered land site in the Kansas City metropolitan area, securing a greater minority shareholder stake in African data centre operator Teraco and acquiring the digital infrastructure investment firm Columbia Capital.

Kansas City hyperscale data centre development 

Digital Realty has acquired roughly 1,440 acres of land at Astra Enterprise Park near Kansas City. The transaction costs approximately US$475m, which the company is paying in a mixture of cash and common units in its operating partnership. The site is intended to support the development of new hyperscale data centre capacity.

To facilitate this construction, Digital Realty has signed an Energy Service Agreement with the local utility provider. This contract will deliver 600MW of utility power by early 2028. At full delivery, the site will support up to two gigawatts of power capacity.

The company cites recent industry analysis ranking the Kansas City metro area as the seventh-largest US data centre market when including capacity under construction or in planning. The region is currently a prominent Top 30 US metro market. 

The acquisition gives Digital Realty valuable exposure to a rapidly-expanding technology sector alongside ample utility infrastructure, vital telecommunications networks and strong connectivity fundamentals.

Increasing the Teraco ownership stake 

Digital Realty is also investing further in its colocation and connectivity operations. The company is increasing its ownership interest in Teraco to 77% by acquiring shares from existing minority shareholders. This transaction involves purchasing a 16% stake for approximately US$650m, primarily via the issuance of 3.4 million common stock shares.

Teraco operates an extensive portfolio of highly-connected and network-dense data centre campuses. The platform serves a growing base of customers across the EMEA region and functions as a key component of the wider global colocation and connectivity footprint for the company. 

Columbia Capital was previously a co-investor in Teraco before Digital Realty acquired its initial majority interest in August 2022.

Purchasing the Columbia Capital platform 

Digital Realty plans to acquire Columbia Capital for approximately US$485m. The deal is funded principally through the issuance of 2.3 million shares of common stock. This issuance includes a lockup period that releases over multiple years and an earnout subject to specific performance hurdles.

Founded in 1989, Columbia Capital focuses on the communications, technology and digital infrastructure space. The firm has secured more than US$9bn in fund commitments from hundreds of investors. These backers include sovereign wealth funds, pension funds, insurance companies, endowments and other institutional investors.

The purchase accelerates the Strategic Private Capital platform at Digital Realty, providing increased expertise and visibility into adjacent digital infrastructure sectors. The established portfolio and experienced investment team at Columbia Capital will strengthen capabilities to capture opportunities within the expanding AI infrastructure ecosystem. The two companies previously partnered on Vela Infrastructure, a subsea cable landing station developer.

“These transactions support the continued momentum of Digital Realty’s three core pillars of growth,” says Andy Power, President and CEO of Digital Realty.

“The purchase of land in the Kansas City metro enhances our ability to serve hyperscale customers’ near-term requirements, while our increased stake in Teraco strengthens our position in Africa’s leading data centre platform and supports the continued growth of our global colocation and connectivity business

“Our history of collaboration with Columbia Capital reflects a shared long-term perspective while providing additional flexibility to support the scaling of both our hyperscale development pipeline and our private capital platform.”

Matt Mercier, Chief Financial Officer of Digital Realty, adds: "Taken together, these transactions are expected to further enhance Digital Realty's growth profile, while maintaining our balance sheet discipline and positioning the company for the continued investment opportunity we see ahead.

The investments are funded principally through issuing 6.3 million shares of common stock and operating partnership units at a weighted average price of $197.54 per unit.

Both the Teraco and the Columbia Capital transactions remain subject to standard customary closing conditions and expect to close in the second half of 2026.