Real estate investor Castleforge, in partnership with data centre operator Galaxy Data Centers, has acquired Redhill Data Centre in Surrey – with plans for expansion at the site.

While the purchase price remains undisclosed, Castleforge said the deal has a development value of more than £100m – including the value of the acquisition and intended costs.

This partnership marks Castleforge's entry into the data centre sector. Financing for the acquisition was provided by ICG Real Estate.

 Located near London in the Foxboro Business Park, the Redhill Data Centre campus spans 11,800 square metres across three buildings with 26MVA of power.

Castleforge and Galaxy intend to significantly expand the capacity of the data centre - by around 50% - to meet increasing demand for digital infrastructure driven by advancements in AI and hybrid cloud computing.

Castleforge said: “At this time, we are actively working on refining the plans for the next phase of the project to align with the needs of our existing clients, new clients and the community.

“We’re looking to submit a planning application shortly, following thorough engagement with the planning authority.

“Upgrades to the existing data centre will commence imminently to provide greater power availability and power densities.

“Construction works for the new facility are planned to begin later this year, with initial phases expected to be ready for occupation in 2026.”

Adam MacLeod, partner at Castleforge, added: “Data centres have been an attractive prospect that we have been monitoring for some time, but with advancements in AI and cloud computing accelerating demand, we have been eager to find the right opportunity in which to invest.

“The sector also fits within our speciality of operational real estate investment, and we see this as a logical extension to our existing capabilities.”

Galaxy said Redhill's 26MVA capacity meets customers' "immediate needs" but it is exploring a 10-15MW expansion as the sector continues expand. 

Paul Leong, chief financial officer at Galaxy Data Centers, said: “Redhill presents a rare opportunity to acquire a high-performing data centre in the prime London market, with strategic potential for expansion in both power and scale.

“We see tremendous growth potential to expand the facility’s power capacity and grow Redhill’s customer relationships. We are dedicated to enhancing the service and experience for all Redhill’s customers throughout this transition and beyond.”