Digital Realty Expands into Africa, Invests $500 Million in Medallion Data Centres

Colocation operator Digital Realty has further penetrated into the African continent becoming the US’ first pure real estate investment trust (REIT) to be present on three countries beating rivals including Equinix, CyrusOne and CoreSite Realty.

The move has been carried out through the acquisition of Nigeria’s colocation and interconnection provider Medallion Data Centres through a joint venture with the Pembani Remgro Infrastructure Fund.

Digital Realty notes that the investment represent the beginning of its $500m commitment to invest in Africa over the next 10 years. Prior to today’s announcements, Digital Realty’s presence in Africa consisted of only three data centers in Kenya’s cities of Nairobi and Mombasa.

Medallion Data Centres (MDC) is a carrier-neutral data center operator with two facilities in Nigeria. Specifically, one data center is in Lagos, Nigeria’s largest city with approximately 15 million people and the other in Abuja, the capital of Nigeria.

Medallion’s Lagos data centre serves as a connectivity hub in Western Africa with over 70 carriers and internet service providers, over 80% of the public peering traffic on the Nigerian Internet Exchange, and a peering point for all subsea cables currently operating in Nigeria with plans to serve as a peering point for the nine new subsea cables scheduled to be in operation in Lagos by 2023.

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As part of the transaction, the joint venture is also acquiring a land parcel adjacent to the Lagos data centre to provide near-term expansion capacity.  Medallion’s management team, led by CEO and co-founder Ikechukwu Nnamani, will continue to lead the business.

William Stein, Chief Executive Officer of Digital Realty, said: “Over the next decade, there will be huge opportunity for global businesses to tap into Africa’s expanding internet economy – with predictions that it could reach 5.2% of the continent’s GDP by 2025, contributing nearly $180 billion to its economy (up from $115 billion in 2020).

“By 2050, the internet economy has the potential to contribute $712 billion. Through major investment in the continent’s internet infrastructure, Digital Realty aims to be a core enabler of these economic and quality of life gains.”

He continued adding that there is a huge opportunity to both meet growing customer demand for connectivity in Africa and improve the internet infrastructure that serves over one billion people who do not yet have proper access to the benefits of internet.

“The expansion of our platform announced today is a leap forward but it is just the start of our $500 million commitment to investment in the continent over the next decade,” Stein said. “We see a huge opportunity to underpin Africa’s expanding internet economy and play a central role in its growth.”