Warehouse developer Segro PLC (LSE:SGRO) shares rose 3.1% after it struck a deal to create its first fully fitted data centre.
The FTSE 100-listed REIT said it expects to pre-lease the centre to a hyperscaler, ie Google's Cloud arm, Amazon's AWS, Microsoft, IBM or Oracle.
It has formed a joint venture with Pure Data Centres Group, owned by US Oaktree Capital Management, to develop a 56MW data centre in Park Royal in west London.
Segro will contribute around £150 million of the £1 billion or so gross capital investment anticipated, which it said is expected to deliver at least a 9% net yield on cost.
The Secretary of State for the Department of Science, Innovation & Technology Peter Kyle said: "Private investment like this innovative partnership between SEGRO and Pure DC will help us ensure the UK has the digital infrastructure it needs to thrive."
Segro CEO David Sleath said the company has "20 years of experience in the powered shell data centre market" and has been "exploring how best to utilise our skills and 2.3GW land-enabled power bank to maximise the opportunity in this fast-growing sector".
The joint venture partners the company with an experienced partner with a track record of delivering data centres to hyperscalers, he said, enabling an expected attractive risk-adjusted return and strengthened its expertise in this area, "enabling us to optimise and accelerate the significant value creation opportunity within our portfolio".