Blackstone Group is in talks to buy the former BritishVolt site in North East England to invest up to £10 billion in building its first major European data centre campus in an area with access to the power needed to run a major digital hub.
The New York-based private equity firm is understood to be offering around £20 million for the site at Cambois, Blyth, Northumberland, and the local council around £110 million to drop its right to buy back the site of the former Blyth Power Station.
Blackstone owns billions of pounds of United Kingdom property but sold its only data centre in Canary Wharf, east London, last year. It owns several in the United States and the Netherlands and has been looking to build its presence in the United Kingdom and Europe. Data centres are an increasingly in-demand sector for commercial property investors with booming areas such as artificial intelligence, online shopping and streaming content all needing physical infrastructure to store data.
They require highly robust power supplies, which the BritishVolt site, as a former power station, can provide. If the deal goes ahead, Blackstone would need to secure planning permission and binding power commitments. Its QTS subsidiary will develop the data centre with the group believing it has the potential of 750 megawatts of power. Blackstone could invest up to £10 billion with another £10 billion invested by future tenants on the site.
The sale to Blackstone comes after the insolvency of BritishVolt, which had planned to build a giant gigafactory on the site to make batteries for electric cars, but it collapsed into receivership in January last year.
The receivers of BritishVolt, Bob Maxwell and Julian Pitts of Begbies Traynor Group, said the transaction marks a new chapter for the 235-acre site.
The secured lender over the property assets of BritishVolt Properties Ltd was a fund managed by the Katch Investment Group which appointed Begbies Traynor’s Maxwell and Pitts as Law of Property Act receivers in November 2022.
“From a difficult situation, the future sale will ensure a very bright future for the site,” said Traynor Group’s Bob Maxwell. “The process of securing a dependable buyer who has a clear, deliverable plan for the long-term use of this strategically important land asset was crucial after the failure of the last business at the site, and was a key factor in gaining the approval of Northumberland County Council who held options on the site.”
“This transaction ensures that a well-funded and respected new owner can bring the enterprise and employment to the site that it deserves, and will be a huge boost for the whole region. Its scale and location make it perfect as the location for a European data hub, and the plans put forward will hopefully kick-start an entire tech industry cluster in the North East from the site,” he added.