Developer behind revamp of former Deutsche Bank headquarters makes entry into growing data market
The developer behind the revamp of Deutsche Bank’s former City of London headquarters is planning a £100m expansion of a data centre site on the outskirts of the capital.
Castleforge has announced its entry into the growing data centre market with its acquisition of the 11,800 sq m Redhill Data Centre Campus in Surrey in partnership with data centre operator and advisory firm Galaxy Data Centers.
The deal, which was brokered by CBRE, comes as Castleforge prepares to start demolition works at its £250m extension of the 75 London Wall site in the Square Mile.
The developer said it had been eyeing opportunities in the data centre market for some time amid surging demand for data which is outstripping supply.
Although London is Europe’s biggest market for data centres and the second biggest in the world after north Virginia in the US, Castleforge said there are difficulties finding newbuild sites close to Metropolitan areas and has targeted existing hubs instead.
Castleforge partner Adam MacLeod said: “Data centres have been an attractive prospect that we have been monitoring for some time, but with advancements in AI and cloud computing accelerating demand, we have been eager to find the right opportunity in which to invest.
“The sector also fits within our speciality of operational real estate investment, and we see this as a logical extension to our existing capabilities.”
MacLeod said Castleforge believes there will be “significant further opportunities to come” in the data centre market, which has grown by 20% in Europe in the year to Q1 2024 alone.
The Redhill campus, located within the Foxboro business park south of Croydon, is currently occupied by three buildings providing a combined 26mva of power, with its 26 existing tenants including Fortune 500 enterprises and businesses working in financial services and AI.
Galaxy Data Centres chief financial officer Paul Leong said the partnership sees “tremendous growth potential” to expand the facility’s power capacity.
He added: “Redhill presents a rare opportunity to acquire a high-performing data centre in the prime London market, with strategic potential for expansion in both power and scale.”
Castleforge’s 75 London Wall project, designed by Orms, is set to move forward this month with the start of enabling works by Erith ahead of main construction work, which will be carried out by Multiplex.
The scheme, which will increase capacity at the 1990s groundscraper by around 50%, is expected to complete in 2027.
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