KKR Lines Up $1B for European Data Center Platform
- May 28, 2020
Investment powerhouse KKR has partnered with data center entrepreneur and executive Franek Sodzawiczny to create Global Technical Realty, a build-to-suit and roll-up acquisition data center platform in Europe.
KKR will make a $1 billion equity commitment primarily from its third global infrastructure fund. This could be supplemented with additional commitments over time, to let GTR develop and build data centers for large technology companies across Europe in the coming years. Along with debt financing, the equity commitment is expected to support more than $2.5 billion of asset development and investment, as the demand for third-party data centers continues to grow.
GTR’s strategy will likely include both ground-up development and selected acquisitions of smaller data center players in Europe, Andrew Peisch, a director on KKR’s infrastructure team and one of the people behind this deal, told Commercial Property Executive. Although the European data center market is rather fragmented, data center demand there is “quite robust,” he said.
GTR will be looking at a range of both Tier 1 data center markets (such as London and Frankfurt) and Tier 2 markets, including Milan, Madrid, Warsaw and Stockholm, among a total of roughly 10 such secondary markets. GTR’s activities will be focused on hyperscale data centers and the large tech companies that favor them, Peisch added.
Veterans on all sides
Sodzawiczny was the founder & CEO of Zenium Data Centers and co-founder & CDO of Sentrum. The GTR management team will also include Martin Carroll, formerly lead director, EMEA Data Center Advisory at JLL; Mark Trevor, formerly partner & head of EMEA Data Center Transaction and Advisory at Cushman & Wakefield and Tom Sodzawiczny, formerly associate director of capital markets at Colliers International.
KKR was advised by Simpson Thacher & Bartlett, of New York. Global Technical Realty was advised by Charles Russell Speechlys, of London.
GTR’s partner on the construction side is Mercury Engineering, of Dublin, a leading engineering contractor with ample experience in data center construction.
Last September, Google announced plans to invest $3.3 billion in expanding its European data centers over the next two years. A $658.8 million slice of that was earmarked for growth at its Hamina, Finland, data center complex, originally converted from what had been a paper mill.