Digital Core REIT has entered into an agreement with its sponsor Digital Realty to acquire interests in either one or two data centre assets.
The first asset is a freehold data centre in Frankfurt, Germany that is valued at EUR558 and Digital Core REIT is looking to acquire either a 25% or 89.9% stake in it.
The second possible acquisition is a 90% stake in a Dallas data centre that is valued at USD199 million.
The effective interests to be acquired will depend upon whether Digital Core REIT raises capital through an equity fundraising to partially finance the transaction.
In the event the equity fundraising does not occur, Digital Core REIT will pursue a 100% debt-funded transaction, and acquire a 25% interest in the Frankfurt facility without acquiring any interest in the Dallas data centre.
“The acquisition of these state-of-the-art facilities will enable Digital Core REIT to deliver upon our external growth strategy and establish a presence in two leading core global data centre markets,” said John J. Stewart, CEO of Digital Core REIT’s manager.
“This transaction also strengthens Digital Core REIT’s portfolio through improved customer and geographic diversification, while delivering near-term DPU accretion and long-term value for unitholders”, he added.
The proposed acquisition is an interested party transaction and will require approval from unitholders, which will be sought at an extraordinary general meeting in 4Q 2022.
Digital Core REIT was last done on the Singapore Exchange at USD0.79, which presently implies a distribution yield of 6% according to data on the Singapore REITs table.