DIGS FOR THE DIGITAL ECONOMY
REITs and Cloud Service Providers Staking Out Data Centre Space By Barbara Carss
AT LEAST 84 commercial buildings nationwide were abuzz during protracted COVID-19-related business shutdowns earlier this year. They house the data centres that have literally underpinned the continued functioning of Canada’s economy and Canadians’ interconnectedness during the past months. Even before a global pandemic wreaked havoc, a handful of U.S. based data centre REITs dramatically outperformed office and retail REITs in that country’s FTSE Nareit index last year. JLL reports the five specialized REITs collectively delivered a 44.2% return in 2019. Since then, one of those REITs has increased its presence of Canada. Equinix will acquire a portfolio in 13 data centres from BCE Inc., expanding its holdings from two co-location facilities in downtown Toronto to seven new markets: Vancouver, Kamloops, Calgary, Winnipeg, Ottawa, Montreal and Saint John, New Brunswick. The $1.04-billion (USD $750 million) allcash deal is slated to close later this year, at 14 October 2020 | Canadian Property Management
which time more than 600 Bell customers within the data centres will automatically transition to Equinix. “The acquisition of these 13 strategic assets further extends the depth and breadth of Equinix’s global platform,” says Jon Lin, Equinix President in the Americas. “Additionally, it opens key gateways for North America to Asia through Vancouver, and North America to Europe through the submarine cable systems in the Millidgeville [Saint John] area.” The other U.S. data centre REIT now active in the Canadian market is also in expansion mode and planning to triple its operating capacity — from 20 to 60 megawatts (MW) — in the Greater Toronto Area. To begin, Digital Realty Trust recently opened up 6,000 square feet of new co-location space, adding 1.5 MW of capacity at its Vaughan facility, which was formerly home to the Toronto Star’s printing plant. "Toronto is a more critical market than ever as businesses recognize the growing
importance of the region as one of the next major technology hubs in North America," submits William Stein, Digital Realty’s Chief Executive Officer. “We continue to expand our colocation capabilities in strategic regions around the world.” Looking back to the fall of 2019, Digital Realty ranked Toronto in the top ten of 60 major international hubs for the digital economy. Based on indicators for economic growth, business and consumer demand, supporting infrastructure, labour force skills, openness to innovation, governance and quality of life, Toronto was also projected to nudge up two places on the so-called Digital Capitals Index, into 8th spot by 2029. Both REITs reported gains in the second quarter of 2020. Digital Realty’s quarterly revenues of USD $993 million (CAD $1.3 billion) represented a 21% increase from the first quarter and 24% increase from Q2 2019. Equinix realized a 6% increase over Q2 2019 as USD $1.47 billion (CAD $1.92 billion) in
