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Digital Realty Grows in Dublin, Gets AWS Service Delivery Tag

Zacks Equity Research

Digital Realty Trust DLR recently expanded in Dublin with the official launch of its second data centre on the company’s Profile Park campus. This brings the company’s total investment in Ireland to more than €200 million, indicating its focus to strengthen regional footprint, given the long-term local demand. 

Moreover, the five-megawatt expansion provides additional scope for growth in the capacity-constrained Irish market to new and existing customers on the campus. The facility is situated 30 minutes from Dublin's city centre, and offers maximum product flexibility with impressive power, cooling, connectivity, security and system redundancy. 

In a separate press release, the company announced that it has achieved the designation of Amazon Web Services (AWS) Service Delivery for AWS Direct Connect. This authorizes Digital Realty to provide the new AWS Direct Connect Hosted Connections which have capacities greater than 500 Mbps.  

This provides a competitive edge to Digital Realty as an AWS Partner Network (APN) member provider of specialized demonstrated technical proficiency, as well as proven customer success in delivering AWS Direct Connect services.

Furthermore, an APN Partners must possess deep AWS expertise and have the ability to deliver solutions smoothly on AWS to achieve the designation. Per management, the designation highlights the company’s record and expertise to deliver AWS services to its global customer base. 

Notably, data-center REITs are experiencing a boom, with growing popularity of cloud computing, Internet of Things and big data, as well as the use of third-party IT infrastructure by several companies. Hence, the company’s focus to expand its operations in strategic markets like Ireland is apt.

Also, Digital Realty is distinguishing itself from its peers through improved services and facilities like AWS and Digital Realty Service Exchange. In fact, customers can connect to AWS privately through specific connections or the Digital Realty Service Exchange that provides international enterprises with seamless access to new hybrid cloud solutions and full set of AWS services. 

Digital Realty currently carries a Zacks Rank #3 (Hold). Over the past six months, its shares have gained 5.3% compared to the industry’s growth of 8.9%.


 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In fact, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five to eight years. Demand has been, remarkably, outpacing supply in top-tier data-center markets. These markets are absorbing new construction at an accelerated pace despite enjoying high occupancy. This, along with an improved outlook for economic growth, will significantly aid data-center REITs such as Digital Realty, as well as Equinix EQIX, CyrusOne Inc. CONE, CoreSite Realty Corp. COR and others.

Nonetheless, this impressive outlook is likely to attract competition in the upcoming period from existing as well as new players. Amid these, pricing pressure is anticipated to prevail for this real estate asset class, resulting in muted growth.

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