Docklands dogfight for telecoms tenants

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The Independent Online

A Swiss property company which caters exclusively for IT and telecoms tenants is about to make its debut in the UK.

With a £460m war chest to spend on property acquisitions, DigiPlex is close to opening two London centres - in Docklands and along the M4 corridor.

DigiPlex creates "co-location facilities" where internet and telecoms companies house their communications equipment. The buildings are kitted out with hi-tech gadgetry, and DigiPlex manages the equipment.

For this, it commands rents of up to £530 per square foot of space. As a comparison, the most expensive office space in London's Mayfair currently fetches £70 per square foot.

The London openings are part of a European strategy to buy and fit out 22 centres in Europe by the end of 2001.

Geir Ramleth, DigiPlex chairman and chief executive, claimed that when the centres are running, the company will generate an annual cash flow of between £160m and £265m.

He said: "This is not a real estate-driven concept, it is driven by the needs of the telecoms and internet businesses. The traditional real estate business is not prepared to do this type of investment, so there is a gap in the market."

In the UK, DigiPlex will face competition from Global Switch. Created by Andy Ruhan, the son-in-law of West Midlands property tycoon Roy Richardson, Global Switch plans to open 20 sites in Europe, the US, Canada and the Pacific Rim.

Last month, UK property company Chelsfield and Canadian developer TrizecHahn bought 66.7 per cent of Global Switch for £100m. Its first UK centre will be at the former Financial Times print works site in London's Docklands.

DigiPlex's first UK centre will also be in Docklands, and Mr Ramleth is approximately one month away from exchanging contracts to buy a property.

DigiPlex was set up in November 1999, originally as Hubco. Its backers include US private equity groups Carlyle Group and Providence Equity Partners, and telecoms companies iAxis and Carrier1.

It currently has one centre active in Oslo, which is fully let.