Equinix, Inc.EQIX is set to open its second Bulgarian International Business Exchange (IBX) data center in Sofia. The data center, called SO2, will cost $19 million and is slated to open in first-quarter 2019. SO2 will support Bulgarian companies by meeting the demands for digital transformation trends.
The company's first Bulgarian data center is also located in Sofia. Notably, Sofia is home to more than 100 companies. Hence, with an additional data center in Sofia, SO2 will likely enjoy high demand from local customers including cloud service providers, network service providers, enterprises and content, as well as digital media companies. Also, many of these companies already use Equinix's services, leveraging on its elaborate global network of more than 200 data centers.
Understandably, expansion in Bulgaria is a strategic fit for the company as it will enable Equinix to easily penetrate into the Balkan market, with convenient access to the EU, Turkey and the Caucasus. In fact, in its first phase of built-out, the IBX data center will offer around 350 cabinets, with scope for additional 1,100 cabinets in the later phases.
The growing need for capacity and capability transformations is driving off-premise deployments. Since SO2 will directly connect to the Bulgarian Internet Exchange (BIX), it will ease business transformations through interconnection with digital supply chain partners and cloud adoption. Further, it will render global access and a secure environment for local and multinational players.
Shares of this Zacks Rank #3 (Hold) company have outperformed the real estate market over the past six months. While shares of the company have gained 3.8%, the real estate market has rallied 3.2% in the said period.
Notably, data-center real estate investment trusts (REITs) will likely continue experiencing a booming market, with growth in cloud computing, Internet of Things and big data, along with an increasing number of companies opting for third-party IT infrastructure. Also, the estimated growth rates for artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five-eight years. These factors, along with an improved outlook for economic growth, are anticipated to provide substantial growth impetus to data-center REITs, including Equinix, Digital Realty Trust, Inc. DLR , CyrusOne Inc. CONE and CoreSite Realty Corporation COR .
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