Chief Executive Officer at Digital Realty Trust
Thanks, Jim. Good afternoon and thank you all for joining us. Our formula for long-term value creation is a global connected sustainable framework and we made further progress on each front, during the fourth quarter. First, we continue to globalize our business with record global bookings and strength across all regions and all product types, including quarterly highs in both our sub 1 megawatt and greater than 1 megawatt categories. We also announced two significant global initiatives.
First, in December, we announced the successful listing of Digital Core REIT as a standalone publicly traded company on the Singapore Stock Exchange. Digital Realty contributed a 90% interest in a portfolio of 10 core data centers concentrated in top-tier markets across the U.S. and Canada, valued at $1.4 billion at a 4.25% cap rate. We generated net proceeds of over $950 million from the transaction and we retained a 35% equity interest in the publicly traded REIT. The offering was very well received and Digital Core REIT has traded up approximately 30% since the IPO enhancing the gain on our remaining ownership stake. In addition to providing investors a stable cash flow stream from a portfolio of high-quality core data centers Digital Core REIT offers key strategic benefits to Digital Realty.
First digital core right is a perpetual capital partner, it has a long-term investment horizon and a global mandate to invest in stabilized income-producing data centers. Second, Digital Core REIT has been carefully crafted to provide a seamless customer experience. Digital Core REIT is sponsored by and externally managed by Digital Realty. We will continue to manage the properties, providing the same level of operational excellence and we will earn fees for asset and property management, as well as acquisitions, dispositions, and development. From a customer perspective, nothing changes when we contribute an asset to Digital Core REIT. Third, digital core right is an ideal partner vehicle for Digital Realty. We expect to contribute additional stabilized core assets to Digital Core REIT in the future and we may also co-invest alongside Digital Core REIT on future investment activity.
Finally, our interests are aligned, as mentioned Digital Realty will continue to own a 10% direct ownership stake in each of the assets. In addition to 35% in the publicly traded vehicle. Digital Core REIT is led by two long time Digital Realty team members. John Stewart, who most of you know well along with Dan Tith. We are excited about their opportunity to create value for Digital Core REIT unitholders, including Digital Realty.
Our second global initiative, which we announced just after quarter-end is the definitive agreement to acquire roughly a 50% stake in Teraco, Africa's leading carrier-neutral colocation provider. This acquisition immediately establishes Digital Realty as the leading colocation and interconnection provider on the high-growth African continent and builds upon our earlier investments in Africa with iColo in both Kenya and Mozambique and in Medallion in Nigeria.
Teraco complements these investments as well as our highly connected facilities in the Mediterranean by hosting the key strategic landing points for subsea cable circling Africa. From Marseille in Athens in the North, Mombasa in Maputo along the East, Durban and Cape Town in the South and Lagos along the Western Coast PlatformDIGITAL is supporting the growth of our customers as well as the broader digital transformation of the entire African Continent.
Teraco has seven state of the art data centers across three key metros in South Africa and serves over 600 customers, including more than 275 connectivity providers over 25 cloud and content platforms and approximately 300 enterprises. Teraco facilitates approximately 22,000 interconnections between customers and host seven cloud on ramps and provides direct access to seven subsea cables. Teraco has historically generated healthy double-digit growth in revenue and EBITDA. In addition, more than half of Teraco's in-service portfolio was developed within the past two years. The current development pipeline will expand the existing asset base by over 25% and Teraco owns land adjacent to its highly connected campuses in Johannesburg and Cape Town that will support another doubling of the in-place capacity, representing significant embedded growth potential and providing considerable runway to support our customers growth.
Leading global cloud and content platforms have recently begun making significant investments in Africa, given the existing capacity within the in-service portfolio, the incremental capacity currently under construction, and the strategic land holdings to support future expansion. Teraco is uniquely positioned to support the expected growth of digital infrastructure in Africa over the next several years.
Let's discuss our sustainable growth initiatives on Page 3. During the fourth quarter Digital Realty are NAREIT's Leader in the Light Award for the 5th consecutive year, complementing the company's 5-star GRESB rating and top ranking within the technology and science sector. Digital Realty was also named one of America's Most Responsible Companies by Newsweek and was the number one ranked data center company. We continue to advance our sustainable financing strategy recasting and upsizing our credit facility with improved terms, while incorporating a sustainability-linked pricing component. With pricing, subject to adjustment based on annual performance against certain green targets. We are committed to minimizing our impact on the environment while simultaneously meeting the needs of our customers, our investors, and our employees along with the broader society and advancing our goal of delivering sustainable growth for all the stakeholders.
Let's turn to our investment activity on Page 4. We continue to invest in the expansion of our global platform. In addition to the Teraco transaction, we've grown our presence along the Eastern Coast of Africa with iColo and supplemented our acquisition of Medallion data centers in Nigeria, with two land purchases in Lagos for future development. Over the next decade, we expect to see huge opportunity for global businesses to tap into Africa's rapidly growing Internet economy and Digital Realty is uniquely positioned to enable this growth.
We also continue to invest in the organic growth of our platform, we spent $580 million on growth capex in the fourth quarter. Our largest quarterly growth capex investment to date. We currently have 44 projects underway, totaling more than 250 megawatt of IT capacity in 27 metros around the world. This capacity was 46% presold as of year-end. Geographically, we continue to invest most heavily in EMEA with 27 projects underway totaling more than 140 megawatts across 16 metros.
In Asia Pacific, we delivered several development projects during the fourth quarter, including facilities in Singapore and Hong Kong. In January, we opened Digital Seoul 1, our first data center in South Korea and the first carrier-neutral facility in the country. This facility will serve as a connectivity gateway for latency-sensitive customer workloads, but can be connected to hyperscale applications hosted in our second facility in Korea totaling over 60 megawatts of capacity, currently under construction just outside the city center. The two facilities will be tied together with fiber to create a connected campus and will complement each other by providing solutions for the full customer spectrum from small performance-sensitive colocation customers to huge hyperscale deployments.
In North America, our development pipeline is diversified by product mix as well as geographically with projects underway in seven different markets. We continue to see strong hyperscale demand in Hillsboro, while we were expanding in Downtown Atlanta to bring on additional colocation capacity at one of the most highly connected destinations in the South Eastern United States. We are bringing capacity online in both of these markets among others given the robust demand backdrop and our tightening inventory position.
Let's turn to the macro environment on Page 5. We are fortunate to be operating in a business lever to secular demand drivers. Our leadership position provides us with a unique vantage point to detect secular trends as they emerge globally on PlatformDIGITAL. Our customers continue to solve some of the most complex IT infrastructure connectivity and data integration challenges. We are witnessing a growing trend of multinational companies across all segments deploying and connecting large private data infrastructure footprints on PlatformDIGITAL across multiple regions and metros globally.
Industry research firm Gartner recently updated their global IT spending forecast for 2022 projecting a 5.1% increase to $4.5 trillion, driven by companies investing in digital data growth strategies. Additionally, Gartner believes that by 2024 75% of organizations will have deployed multiple data hubs to drive mission-critical data analytics sharing and governance in support of digital data growth strategies. These forecasts are consistent with our view of where the puck is headed.
Our market intelligence tool, the Data Gravity Index forecast similar growth in the intensity of data creation and its gravitational pull on global IT infrastructure. In addition, our industry manifesto enabling connected data communities serves as the global playbook for industry collaboration to tackle data gravity challenges head-on and unlock a new era of growth opportunity for all companies. Digital Realty was recently named Company of the Year by Frost and Sullivan for North American data center best practices. This award reflects our continued focus on operational excellence underpinned by continuous innovation and execution of the platform digital roadmap.
We are honored by the strong validation of the differentiated value proposition, we are creating for customers and partners. Given the resiliency of the demand drivers underpinning our business and the relevance of our platform in meeting these needs, we believe we are well-positioned to continue to deliver sustainable growth for customers, shareholders, and employees whatever the macro environment may hold in store.
With that, I'd like to turn the call over to Andy to take you through our financial results.