Singapore-listed Digital Core REIT, sponsored by Digital Realty, has agreed to sell interests in three North American assets for a combined total of US$316m (€274m) and redeploy the proceeds to acquire partial interests in two data centres in Asia.
The REIT said it has bought a 2.5% interest in Singapore from Digital Realty for S$87m (€59m) and acquired an additional 25% interest in Digital Osaka 3 from Digital Realty for ¥17.6bn (€96m), increasing its ownership stake from 20% to 45%.
The balance of the sale proceeds of US$117m will be used to pay down debt and up to US$20m to repurchase units on the open market.
The transaction involved the sale of 90% interest in 371 Gough in Toronto to Digital Realty for C$180m (€112m); the sale of its 90% interest in 200 N. Nash in Los Angeles to Digital Realty for US$79 million; and the sale of a 39% interest in 8217 Linton Hall.
“With this transaction, we expect to tactically enhance Digital Core REIT’s portfolio mix, leverage and distribution per unit, in an effort to better position the REIT for the unprecedented opportunity we see ahead,” said Digital Realty chief investment officer Greg Wright.
“Digital Core REIT was formed to capitalise on the enormous growth potential within the data centre sector, which is now materialising in the midst of the sector’s ongoing investment cycle.”
“This transaction marks our entry into Singapore and strengthens our presence in Japan – a pivotal step in our strategy to expand in the Asia-Pacific region,” added John Stewart, CEO of Digital Core REIT Management, the manager of Digital Core REIT.
“In addition to the strategic merits, this transaction delivers significant financial benefits, generating meaningful DPU accretion while improving balance sheet flexibility.”
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