Ascendas REIT has bought a S$904.6m (鈧�564m) European data centre portfolio in a deal that marks the Singapore listed trust鈥檚 entry into the international data centre market.
The portfolio, which has been acquired from Digital Realty Trust comprises four UK data centres worth 拢250.3m (鈧�287.5m), three assets in the Netherlands, three in France and one asset in Switzerland amounting to 鈧�276.9m.
The centres have a total net lettable area of 61,637sqm.
William Tay, executive director and CEO of Ascendas Funds Management, said: 鈥淭his acquisition gives us a unique opportunity to own a portfolio of well-occupied data centres across key markets in Europe.
鈥淚t complements our existing data centre portfolio in Singapore, and will increase the sector鈥檚 contribution to S$1.5bn, or 10% of investment properties under management.鈥�
Addressing an analyst briefing, Tay said: 鈥淕iven the strong competition for these assets, we have secured a reasonable yield of 6% in the transaction.鈥�
Ascendas has chosen Europe for its expansion into this asset class outside Singapore because of the opportunity to acquire a scalable investment there.
Tay said the investment provided entry into three of the four FLAP (top tier key) data centre markets 鈥� London, Amsterdam and Paris 鈥� in Europe. 鈥淥ur strategy is to enter each of these markets with a meaningful acquisition from the start to enable us to scale up from there,鈥� he said.
Yeow Kit Peng, Ascendas Reit鈥檚 head of capital markets, said the total acquisition cost of S$960m would be funded by S$612.5m of gross proceeds from an equity raising completed in December, and the balance would be debt-funded or from internal cash resources.
To read the digital edition of the latest IPE Real Assets magazine click here.
