Mapletree Investments and Mapletree Industrial Trust have announced to form a 50:50 joint venture to acquire 10 Powered Base Building data centres from digital realty and to co-invest with Digital Realty in three existing Digital Realty Turn-Key Flex hyper-scale data centres in North America.
The data centres are located across North America with a total transaction value of approximately US$1.37 billion million (S$1.9 billion).
MIT reportedly looks to raise at least S$350 million through a private placement to partially fund its joint purchase.
“Partnering with leading real estate investors such as Mapletree and MIT enables us to expand available sources of capital funding while powering our customers’ digital ambitions,” said Digital Realty Chief Executive Officer Mr A. William Stein. “This transaction also underscores the attractiveness of high-quality hyper-scale data centres anchored by investment grade tenants. We look forward to working with the Mapletree Group to explore more opportunities worldwide.”
The 13 properties encompass 2.1 million square feet of total net lettable area on predominantly freehold land strategically located in key markets, with six properties concentrated in Northern Virginia, the world’s largest data centre market.
The remaining properties are primarily located in the top 10 North American data centre markets, which represents about 34% of the global insourced and outsourced data centre market (by net operational sq ft).
The global insourced and outsourced data centre space is expected to grow at a compound annual growth rate of 4.9% from 2017 to 2023. Growth in data consumption and storage, as well as cloud computing, continues to drive the demand for data centre space.
Mr Hiew Yoon Khong, Group Chief Executive Officer of Mapletree, said, “We have deepened our presence in the fast-growing data centre sector with our second portfolio acquisition in North America.”
“This portfolio acquisition adds high-quality properties in key data centre markets underpinned by global cloud and colocation players. Our strategic collaboration with a leading global provider of data centre solutions like Digital Realty will enable us to scale up meaningfully in developed economies for this resilient asset class,” he said.
Mr Tham Kuo Wei, Chief Executive Officer of Mapletree Industrial Trust Management Ltd., as manager of MIT, said, “The proposed transactions will enhance the sustainability of MIT’s returns to Unitholders with the increased freehold land component and long leases with embedded rental growth.
The Turn-Key Portfolio joint venture is expected to be completed late this year while the Powered Shell Portfolio acquisition is expected to be completed early next year.
