Castleforge and Galaxy Data Centers Join Forces to Acquire Redhill Data Centre Near London

Castleforge and Galaxy Data Centers to Acquire Redhill Data Centre

In a significant move for the data infrastructure sector, real estate investor Castleforge has partnered with Galaxy Data Centers to acquire the Redhill Data Centre, valued at over £100 million. This acquisition marks Castleforge's entry into the growing data center market, combining their expertise in operational real estate investment with the industry experience of Galaxy Data Centers.

The Redhill Location

Situated near London, in the Foxboro Business Park, the Redhill Data Centre encompasses a substantial area of 11,800 square meters, distributed across three buildings. The facility boasts a formidable power capacity of 26 MVA, making it well-equipped to support a range of businesses. Currently, it accommodates 26 tenants, including Fortune 500 companies from diverse sectors such as financial services and artificial intelligence, all attracted by its green energy options and low-latency connections to major data hubs like Slough and the Docklands.

In a research letter released in January 2024, Castleforge underscored that the soaring demand for digital data strongly outpaces the existing power supply. The difficulties in establishing new data centers in metropolitan areas have rendered existing facilities more appealing for investment opportunities. Adam MacLeod, a partner at Castleforge, noted, "The data center sector has been in our sights for some time, recognizing the surge in demand fueled by advancements in AI and cloud computing. Finding the right opportunity was crucial for our investment strategy."

Strategic Importance

This acquisition holds considerable strategic value. Paul Leong, Chief Financial Officer at Galaxy Data Centers, remarked, "The Redhill facility presents a rare opportunity to acquire a high-performance data center in London’s prime market. We anticipate significant growth potential by expanding both the power capacity and customer relationships at Redhill. Our commitment lies in enhancing service excellence for all our customers during this transition and beyond."

Galaxy Data Centers aims to leverage its extensive experience in North America to bring best practices to Europe and the Asia-Pacific region as they expand. Notably, Dave Misra, Managing Partner of Galaxy, stated, "Redhill, with its robust 26 MVA capacity, is aptly equipped to meet customers' immediate needs. We are currently exploring plans for a 10-15 MW build-to-suit expansion to ensure we meet the needs of edge, hyperscale, and enterprise customers in the fast-evolving digital landscape."

Rapid Growth in Data Center Demand

The demand for data centers across the EMEA region is on a steep rise, with London being the largest and most dominant market in Europe, second globally only to Northern Virginia. According to recent data from CBRE, the European data center market experienced nearly a 20% year-over-year growth in the first quarter of 2024, with notable development across key countries, including Germany, the Netherlands, and France.

Adam MacLeod further emphasized the significance of the Redhill Data Centre's location, stating, "Its proximity to London positions it as a crucial hub for digital services that require speedy connections to the capital. With the continuous pace of digital innovation, we believe this is the opportune moment to invest in the market, anticipating further opportunities ahead."

Financial Outlook

With this acquisition of an already operational data center in one of the world's critical markets, Castleforge is optimistic about achieving substantial return on investment, alongside ample expansion opportunities to cater to the escalating demand for digital infrastructure in the upcoming years.

Castleforge is set to acquire the site from a global data center operator, with CBRE facilitating the deal. Financing for this acquisition has been arranged through ICG Real Estate, a global alternative asset manager. Since its inception in 2010, Castleforge has invested around £1 billion in asset value across the UK and Europe.

For further details about the Redhill Data Centre, interested parties can visit redhilldatacentre.com or castleforge.com.

About Castleforge

Castleforge is an investment firm focused on creating innovative places, products, and platforms aimed at transforming the built environment and enhancing sustainability, productivity, and opportunities. Operating out of London, the firm has a long-standing investment legacy throughout the UK and Europe.

About Galaxy Data Centers

Established in 2016, Galaxy Data Centers specializes in delivering customized solutions for digital infrastructure, adeptly integrating modern energy-efficient technologies. Galaxy is committed to ensuring seamless operation and exceptional service for its clients, focusing on the rapidly changing landscape of digital demands.