Blackstone raises $1.75 billion in data center REIT IPO targeting AI infrastructure assets

Blackstone raises $1.75 bn in data centre REIT IPO

New York: Blackstone raised $1.75 billion through the initial public offering of Blackstone Digital Infrastructure Trust, underscoring strong investor appetite for artificial intelligence infrastructure assets. The Blackstone-backed real estate investment trust (REIT), focused on acquiring data centers benefiting from the AI boom, sold 87.5 million shares at $20 apiece, according to a statement on Wednesday. The vehicle plans to acquire already-built and leased data centers valued between $250 million and $1.5 billion that are rented to investment-grade hyperscalers, company filings showed. Also read: India's next data centre race will be won on speed, scale and sustainability The IPO reflects two major priorities for the $1.3 trillion alternative asset manager: expanding its presence in AI infrastructure and broadening access to individual investors beyond traditional institutional clients such as pension funds and endowments. "With an estimated $1 trillion total addressable stabilized data center market expected over the next five years, we believe the industry represents a substantial investment opportunity," the company said in earlier filings. The listing is the largest-ever IPO of a blind-pool REIT, according to Bloomberg data, as the company has not yet acquired any data center assets. Investors in the offering will receive bonus shares equal to 1% of their purchase, rounded down to the nearest whole share, filings showed. An affiliate of Blackstone had also indicated interest in purchasing up to $200 million worth of shares in the REIT. Also read: There's more to Uber's India data centre bet than meets the eye Blackstone Digital Infrastructure Trust will be externally managed by a Blackstone affiliate in exchange for management and incentive fees. It will also receive priority access for 24 months to yield-oriented, stabilized and long-duration turnkey data-center acquisition opportunities sourced by Blackstone. The IPO was led by a group of banks including Goldman Sachs, Citigroup, Morgan Stanley, Barclays, Bank of America, Deutsche Bank, JPMorgan Chase, Royal Bank of Canada and Wells Fargo. The shares are expected to begin trading on the New York Stock Exchange on Thursday under the ticker symbol BXDC.

Blackstone data center REIT raises $1.75 billion in US IPO

May 13 (Reuters) - A newly formed Blackstone data center real estate investment trust has raised $1.75 billion in its U.S. initial public offering, it said on Wednesday. Blackstone Digital Infrastructure Trust, which will focus on acquiring newly constructed data centers, sold 87.5 million shares in the IPO at $20 apiece. Artificial intelligence-linked companies have spearheaded the U.S. IPO market this year, as investors bet on strong growth expectations from wider adoption of the technology. The new Blackstone vehicle plans to target data centers worth $250 million to $1.5 billion leased to investment-grade hyperscale tenants in markets such as Northern Virginia, Ohio, Phoenix, Maryland and Austin. It has identified and reviewed roughly $25 billion in near-term opportunities in established data markets. Data centers provide necessary infrastructure for storing, processing and analyzing vast troves of information crucial for training AI models. AI spending by Big Tech is now set to surpass $700 billion this year, up from around $600 billion previously, as they pour record sums into building an infrastructure to support complex, high-stake tasks. Blackstone, the world's biggest alternative asset manager, is a prolific investor in data centers and digital infrastructure. Its portfolio comprises more than $150 billion in data center assets globally. The company took data center operator QTS Realty Trust private in 2021 in a roughly $10 billion deal. A Blackstone affiliate had indicated interest in investing up to $200 million in the offering. Each IPO investor was offered bonus shares equivalent to 1% of their investment as a sweetener. Goldman Sachs, Citigroup, Morgan Stanley, Barclays, BofA Securities, Deutsche Bank Securities, J.P. Morgan, RBC Capital Markets and Wells Fargo Securities acted as joint lead book-running managers for the IPO. Blackstone Digital Infrastructure Trust will begin trading on the New York Stock Exchange under the symbol "BXDC" on Thursday. (Reporting by Arasu Kannagi Basil and Disha Mishra in Bengaluru; Editing by Shilpi Majumdar)