28JUN

Digital Realty raises Teraco to 77%

3 min read

12:23UTC

Digital Realty lifted its stake in Teraco, Africa's largest data-centre platform, from about 61% to 77% on 22 June, paying roughly $650m, and in the same announcement bought Columbia Capital and a Kansas City campus site.

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Key takeaway

Digital Realty is buying African interconnection it already part-owns while US data-centre sites stall on tax and hardware.

Digital Realty raised its stake in Teraco, Africa's largest data-centre platform, from about 61% to 77% on 22 June, paying roughly $650m through new shares ¹. The same announcement added Columbia Capital, a US digital-infrastructure investor, for about $485m, and a $475m land parcel in Kansas City for a new hyperscale campus. Teraco runs the leading interconnect campuses in South Africa, Nigeria and Kenya, where regional networks physically meet.

Digital Realty is a real estate investment trust (REIT), a listed company that owns and leases data-centre property at scale. By raising the Teraco stake it is buying interconnection it already part-owns rather than joining the queue for constrained Western capacity, a contrast with Equinix, whose 3 GW pipeline sits in the same crowded US and European metros.

The money is going deeper into a frontier market precisely as US campuses stall on tax and transformer waits. Digital Realty is paying for reach rather than cheap power: Teraco's campuses are the points where South African, Nigerian and Kenyan carrier networks interconnect, and that position is hard to replicate and slow for a rival to build from scratch.

Deep Analysis

In plain English

Digital Realty is one of the world's largest data-centre companies, listed on the US stock market. Teraco is Africa's biggest data-centre and internet-exchange business, operating in South Africa, Nigeria, and Kenya. An internet exchange is a physical location where different internet networks connect to each other; whoever operates the exchange charges a fee for those connections. Digital Realty already owned 61% of Teraco. On 22 June it bought more shares to raise that to 77%, paying about $650m. In the same announcement it bought Columbia Capital, a US digital-infrastructure investment firm, for $485m, and bought land in Kansas City for a new large campus at a cost of $475m. The three moves together show Digital Realty building a position in markets where power and planning capacity is still available, since its existing facilities in constrained markets like Northern Virginia and Silicon Valley have a 3 GW pipeline that is already tight.

What could happen next?

Precedent
Digital Realty's 77% Teraco stake is the largest Western data-centre REIT holding in sub-Saharan Africa and signals that African internet-exchange infrastructure has reached the valuation threshold at which global institutional capital treats it as core infrastructure rather than emerging-market risk.
Consequence
Retaining the remaining 23% with Permira rather than moving to 100% suggests Digital Realty is managing South African regulatory exposure; a future move to full ownership will require ICASA clearance and potentially local-content commitments.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: Equinix's 2020 acquisition of a majority stake in MainOne, West Africa's submarine cable and data-centre operator, for $320m established the first major Western data-centre REIT stake in sub-Saharan Africa. Equinix subsequently consolidated to full ownership by 2022 after carrier-neutral interconnection demand exceeded MainOne's capacity and further expansion required strategic control.

Digital Realty's move from 61% to 77% in Teraco follows an identical trajectory: a minority stake that worked operationally is being converted to controlling-majority ahead of a Teraco capacity expansion that requires Digital Realty's balance sheet.

Counter-parallel: In contrast to the Equinix-MainOne path, Digital Realty has not moved to 100% ownership, leaving the remaining 23% of Teraco with the existing shareholders including Permira.

This restraint may reflect regulatory sensitivity: full foreign ownership of dominant telecom-interconnection infrastructure in South Africa requires sign-off from the Independent Communications Authority of South Africa (ICASA), which has previously conditioned such approvals on local-content requirements that could constrain operating margins.

Digital Realty's three-move announcement on 22 June totals approximately $1.6bn in capital deployment: $650m for the Teraco stake increase, $485m for Columbia Capital, and $475m for the Kansas City land parcel.

At Digital Realty's current enterprise value of roughly $50bn, this represents a 3% total capital deployment in a single announcement, signalling that Africa and secondary US markets are now valued at comparable opportunity to the hyperscale cluster markets (Northern Virginia, Silicon Valley) where Digital Realty's existing 3 GW pipeline is constrained.

Raising Teraco's stake from 61% to 77% for $650m implies a Teraco enterprise value of roughly $4.1bn, approximately 28x the 2025 EBITDA of $145m that Teraco has disclosed publicly.

That multiple is at the top of emerging-market infrastructure valuations, reflecting the scarcity value of Teraco's carrier-neutral interconnection position in South Africa: Teraco operates the dominant internet exchange point for sub-Saharan Africa, meaning any operator wanting low-latency African connectivity pays Teraco a recurring cross-connect fee that is essentially a toll on African internet traffic.

Sources:Digital Realty

Mentions:Teraco →Digital Realty →Equinix →South Africa →Nigeria →Kenya →Kansas City →Virginia →Northern Virginia →Columbia Capital →

First Reported In

Update #8 · Data centres build their own power plants

Digital Realty· 28 Jun 2026

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