Ascendas REIT has bought a S$904.6m (€564m) European data centre portfolio in a deal that marks the Singapore listed trust’s entry into the international data centre market.
The portfolio, which has been acquired from Digital Realty Trust comprises four UK data centres worth £250.3m (€287.5m), three assets in the Netherlands, three in France and one asset in Switzerland amounting to €276.9m.
The centres have a total net lettable area of 61,637sqm.
William Tay, executive director and CEO of Ascendas Funds Management, said: “This acquisition gives us a unique opportunity to own a portfolio of well-occupied data centres across key markets in Europe.
“It complements our existing data centre portfolio in Singapore, and will increase the sector’s contribution to S$1.5bn, or 10% of investment properties under management.”
Addressing an analyst briefing, Tay said: “Given the strong competition for these assets, we have secured a reasonable yield of 6% in the transaction.”
Ascendas has chosen Europe for its expansion into this asset class outside Singapore because of the opportunity to acquire a scalable investment there.
Tay said the investment provided entry into three of the four FLAP (top tier key) data centre markets – London, Amsterdam and Paris – in Europe. “Our strategy is to enter each of these markets with a meaningful acquisition from the start to enable us to scale up from there,” he said.
Yeow Kit Peng, Ascendas Reit’s head of capital markets, said the total acquisition cost of S$960m would be funded by S$612.5m of gross proceeds from an equity raising completed in December, and the balance would be debt-funded or from internal cash resources.
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