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Echelon Data Centres receives £673m investment from Starwood Capital

Written by Tue 20 Feb 2024

Image of Echelon Data Centres LCY10

Investment firm, Starwood Capital Group, has made a £673 million ($850 million) investment in Echelon Data Centres for continued expansion. 

Starwood Capital’s investment in Echelon Data Centres will make them a 50% shareholder, valuing the company at around £2.1 billion ($2.6 billion). This investment is made through Starwood Opportunity Fund XII and Starwood Real Estate Income Trust Inc.

“For Starwood Capital, this significant and strategic investment continues our long-term focus and capital deployment into a core sector for our European business,” said Lorcain Egan, CoHead of Europe at Starwood Capital.

This move aligns with Starwood’s recent launch of Starwood Digital Ventures to manage its global data centre investment strategy and operations. 

Chairman and CEO of Starwood Capital, Barry Sternlicht, said data centres have been a ‘core thematic’ for Starwood in the US and Europe over the past five years. Sternlicht stressed the transaction materially enhances the firm’s data centre footprint and capabilities in Europe.

“We will continue to find further opportunities to deploy capital into transactions with attractive risk-adjusted returns for our investors, both in Europe and the United States, where we have an additional 600MW of projects in our pipeline, bringing our total global platform to 1.5GW,” said Sternlicht.

Starwood Capital holds a strategic landbank exceeding 500MW, with 168MW in advanced stages of agreement with occupiers and slated to begin construction in the first half of 2024.

Established in 2016, Irish Echelon Data Centres specialises in large-scale facilities to meet the increasing demand for data and computing resources. Currently, Echelon has 140MW of operational or near-completion capacity, including a fully pre-committed 91.4MW hyperscale campus in Dublin.

“Starwood Capital’s scale, access to capital, and track record position Echelon incredibly well to service our customers’ growth requirements on a global basis. We look forward to the continued growth of the business and expansion into new European markets and beyond,” said Niall Molloy, CEO and Founder of Echelon Data Centres.

CIO of Echelon Data Centres, Trevor Whelan, said the company was excited to be one of the foundation blocks as Starwood Capital grows its digital infrastructure business.

“Today’s announcement is a huge milestone for the Echelon team on the journey to establishing a global data centre platform centred around large-scale campuses, and vertical integration with power generation,” said Whelan.

Echelon Data Centres currently has four Irish sites under development, with a combined potential capacity of more than 500MW. Echelon’s portfolio also includes a fully let and operational 20MW LCY10 data centre facility in London’s Docklands.

The data centre company is also in the process of constructing another data centre facility named LCY20 in Buckinghamshire, which will have a capacity of 30MW.

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Written by Tue 20 Feb 2024

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