Digital Realty DLR has forayed into the Indonesian market through a 50-50 joint venture with Bersama Digital Infrastructure Asia (BDIA). The newly formed entity, Digital Realty Bersama, will develop and operate data centers across Indonesia, enhancing the company's presence in the rapidly growing Asia-Pacific region. This expansion significantly strengthens Digital Realty’s PlatformDIGITAL footprint, supporting Indonesia’s accelerating digital economy.

Digital Realty Bersama combines Digital Realty’s global expertise with BDIA’s local market knowledge and network capabilities. BDIA’s carrier-neutral data center platform, Bersama Digital Data Centres (“BDDC”), has been contributed to the JV, which will now operate as Digital Realty Bersama.

Indonesia’s digital landscape is poised for exponential growth, fueled by a young, tech-savvy population and increasing demand for cloud computing and AI-powered infrastructure. According to Structure Research, the Jakarta colocation market is expected to generate $499 million in 2025, with a five-year CAGR of 11%. 

Recognizing this potential, Digital Realty has committed approximately $100 million for a 50% stake in the data centers and adjacent land, solidifying its position in one of Southeast Asia’s promising data center markets. Apart from its equity interest, DLR will receive property management and development fees from the JV.

Digital Realty Bersama

BDDC’s experienced leadership team, including CEO Angelo Syailendra and Chairman Setyanto Hantoro, will continue to oversee operations, with Krishna Worotikan, former Country Chief Financial Officer of Microsoft Indonesia, joining as CFO.

Digital Realty Bersama owns and operates a connected campus featuring two high-performance data centers — CGK10 in West Jakarta and CGK11 in Central Jakarta. CGK11, a newly launched state-of-the-art facility, initially offers 5 MW of IT load capacity, with plans to scale up to 32 MW. 

Positioned strategically in Jakarta’s central business district, CGK11 is designed to serve as a key connectivity hub, providing direct access to a vast array of networks and services throughout Indonesia as well as a direct connection to the Association of Indonesian Internet Service Providers (APJII). Moreover, Digital Realty's service orchestration platform, ServiceFabric, will supplement connectivity and optimize hybrid IT workflows and AI workloads for enterprises.

Final Words on Digital Realty

Digital Realty’s strategic push into Indonesia reinforces its global growth trajectory, diversifying its portfolio while tapping into an underserved yet high-growth market. With growing digital transformation, cloud computing and the proliferation of artificial intelligence, the company is well-poised to gain from an unmatched global footprint of data centers. Its services, like PlatformDIGITAL, are likely to provide its tenants with a seamless experience. A solid tenant base assures stable revenues. 

The accretive buyouts and investments in land and infrastructure globally and a robust development pipeline bode well for long-term growth. A healthy balance sheet position, with a well-laddered debt maturity schedule, is likely to aid future endeavors. However, intense competition from other industry players leads to aggressive pricing pressure, weighing its profitability.

Shares of this Zacks Rank #3 (Hold) company have declined 16.7% over the past three months against the industry’s growth of 4.9%. However, DLR has a long-term growth rate of 8.2%, ahead of the industry’s average of 6.5%.

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Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Gladstone Land LAND and Sabra Healthcare REIT SBRA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Gladstone’s 2025 FFO per share is pegged at 54 cents, which indicates year-over-year growth of 14.9%.

The Zacks Consensus Estimate for Sabra’s full-year FFO per share stands at $1.49, which calls for an increase of 3.5% from the year-ago period.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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