Digital Realty Trust (DLR) has begun construction on a custom data center facility in London for HSBC (HBC), the global banking company. The new HSBC facility will be located on a development site in suburban London that was acquired by Digital Realty in April 2007. HSBC and Digital Realty Trust have signed a long-term lease agreement for the build-to-suit data project, which is expected to be completed in late 2008.
The announcement is the latest big deal in a blockbuster January for Digital Realty Trust. Despite concern about a possible slowdown in enterprise IT spending and tight credit in the commercial real estate market, Digital Realty has leased three entire data center buildings already in 2008.
"A project of this magnitude requires a high level of specialized expertise, which is why we put such an emphasis on selecting the right partner," said Roy Adorni, Global Head of Data Center Services for HSBC. "Having a partner for this datacentre project with the experience and resources that Digital Realty Trust offers is a major asset for us." Adorni said Digital Realty's expertise will be critical in ensuring that "the project goes according to plan, meets all of our technical needs, and is completed on time and on budget."
"This project with HSBC reflects our unique approach to partnering with companies on build-to-suit datacentres, offering them control and flexibility while making these large projects very cost-effective," said Chris Crosby, Senior Vice President of Digital Realty Trust. "Our proven ability to work with local utility companies and identify sites that have or can be provisioned with sufficient power to support today's datacentre power and cooling requirements gives our customers a significant advantage when looking to expand, consolidate or upgrade their datacentre facilities."
In November HSBC postponed a huge data center project in upstate New York, citing the "business climate." The decision was seen by some as the first sign that recent losses in the subprime mortgage market may prompt major financial companies to reassess the pace of their data center construction spending. The London project indicates that HSBC is continuing to build next-generation data centers, but being selective about locations.
On Jan. 22, Digital Realty announced two major leases, including a 124,000 square foot greenfield build in Dublin (the tenant has since been identified as Irish telecom company Eircom) and a lease of an 86,000 square foot building in Santa Clara, California to a single tenant.
Digital Realty Trust is a leading operator of data centers and Internet gateways, and owns 70 properties with 12.3 million rentable square feet in 26 markets throughout North America and Europe.