(Bloomberg) -- Blackstone Inc. has been selected to purchase the former Britishvolt site in the north of England where it plans to build what could become Europe’s largest data center.
A proposal for funds managed by the private equity firm to purchase the site on behalf of its data center landlord QTS and for Northumberland County Council to amend its right to buy it back will face a vote by councilors on April 23, according to a filing Monday.
The proposed deal would see Blackstone’s funds acquire the land for about £20 million ($25 million), followed by phased payments of as much as £110 million that will flow to the council once planning and power have been secured, leases have been signed and construction completed.
Power supply is a major barrier to data center development, constraining new facilities despite soaring demand driven by the AI boom. That’s encouraging developers to look beyond traditional hot spots like West London as technology giants like Microsoft Corp. and Amazon.com Inc. scrap for limited capacity.
The 252-acre former Britishvolt site in Blythe, Northumberland, previously housed a power station, sits across a major national grid substation and is just 15 kilometers (9.3 miles) from the Newcastle Internet exchange, meaning it has the potential for data center development despite its distance from major population centers.
While the exact power supply and size remains uncertain, Blackstone estimates the site could accommodate a facility of as much as 750 megawatts, which would make it Europe’s largest.
It would be QTS’ first project in the UK and the first major European acquisition by the landlord since it was taken private by Blackstone. QTS already owns one project in the Netherlands.
The acquisition is being made on behalf of the seventh fund in Blackstone’s European real estate series, as well as a Blackstone-managed infrastructure fund. Blackstone Real Estate Partners Europe VII had raised about €5.1 billion ($5.4 billion) as of the end of last year.
Depending on the scale of power delivered to the site, the project could ultimately entail as much as £10 billion of investment from Blackstone’s funds. That’s likely to be spread over several years as Blackstone and QTS will first need to seek planning permission and secure electricity before construction and operations can begin.
Gigafactory Ambitions
A deal would seal the final blow to the UK’s ambitions to host a gigafactory at the site after Britishvolt collapsed into administration early last year. Blackstone is championing the 2,600 jobs it estimates will be created in the construction and operation of the site in a bid to persuade councilors to approve the proposals.
Britishvolt originally bought the site for about £4 million but Northumberland County Council retained a right to buy it back if the plans did not progress. The QTS proposal involves paying the administrators for the land and then paying the council to rescind the buyback clause so the developer has certainty to commit to future investment.
Administrators to Britishvolt originally selected Recharge Industries to buy the collapsed company in February last year but the Australian startup reportedly failed to complete payment for the land.
Blackstone bought QTS for about $10 billion in 2021 and has invested heavily in the company, making data centers one of its key global property bets, together with warehouses and rental housing.
