US asset management giant Blackstone has made its first direct data center investment in Europe with the acquisition of the Harbour Exchange data centre from Landsec for £196.5 mln (€230 mln), or a net initial yield of 3.99%.
The acquisition was made through Blackstone European Property Income Fund (BEPIF), Blackstone's perpetual-life vehicle providing income-focused individual investors with access to institutional quality European real estate.
Harbour Exchange provides 278,000 sq ft (25,820 m2) of high-quality data center in the Docklands area of London, adjacent to Millwall Dock, directly to the south of Canary Wharf. It comprises of two adjoining re-purposed office buildings, originally constructed in 1989 with approximately 278,198 sq ft of data centre and office accommodation. The space is let to Equinix (UK) with an unexpired lease term of nearly 20 years.
The disposal is in line with Landsec’s strategy set out in October 2020, which identified a future growth strategy focused on three key areas: Central London offices; major retail destinations; and urban mixed-use neighbourhoods in London and other major regional cities.
The goal of this strategy is to accelerate growth through recycling capital into higher return opportunities and deliver for investors an attractive combination of income and growth driven returns.
The transaction is the latest in a number of steps Landsec has taken in recent months to support this strategy, including the purchase of a majority stake in MediaCity, the 37 acre media, digital and tech hub in Salford, Greater Manchester.
Marcus Geddes, managing director Central London at Landsec said: 'The sale of Harbour Exchange is very much aligned with our strategy. Through this disposal we are recycling capital into opportunities where we can bring to bear Landsec’s skills and expertise to drive growth and returns for our investors.'
The sale is unconditional, with completion scheduled to take place before the end of the calendar year.
Blackstone Real Estate already owns a portfolio of over 10 million sq ft of data centers across its business, held indirectly.
