Ascendas REIT has proposed to acquire a portfolio of data centres located across Europe for SGD904.6 million.
The portfolio is being acquired from Digital Realty Trust, and it comprises assets in the UK (4 properties), the Netherlands (3 properties), France (3 properties) and Switzerland (1 property).
“This acquisition gives us a unique opportunity to own a portfolio of well-occupied data centres located across key markets in Europe”, said William Tay, CEO of Ascendas REIT’s manager.
“It complements our existing data centre portfolio in Singapore and will increase the sector’s contribution to SGD1.5 billion or 10% of investment properties under management”, he added.
“We see good potential in the data centre business and will continue to source and make further acquisitions when the opportunities arise”, he posited.
The target has a weighted average lease expiry (WALE) of 4.6 years by rental income.
About 83% of the leases, by rental income, have embedded annual rent escalations of between 1.0% to 3.0%.
As at 31 December 2020, 58% of the target portfolio is on triple net lease.
The acquisition consideration will be funded with SGD612.5 million raised from a December 2020 equity fundraising exercise, and SGD347.5 million of debt.
The REIT’s full presentation on the proposed acquisition can be viewed here.
Ascendas REIT was last done on the SGX at SGD2.97 prior to a requested trading halt, which implies a distribution yield of 4.95% according to data compiled on the Singapore REITs table.