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Capitaland Ascendas Reit Buys Fifth UK Data Centre for $209.4 Million

SINGAPORE – CapitaLand Ascendas Reit has completed the acquisition of a data centre facility in London at the purchase consideration of £125.1 million (S$209.4 million), based on an agreed property value of £119.4 million.

The acquired high-specification Tier III co-location data centre facility is located in north-west London, and is the fifth data centre acquired by the real estate investment trust (Reit) in Britain.

This increases the Reit’s data centre investments in Britain by 54 per cent to $569.8 million, the Reit manager said on Thursday. It highlighted the facility’s strategic location in Watford – a large town situated in north-west London – as an attractive option for data centre developers in the “power-constrained and relatively high-cost” central London region.

The manager also noted the facility’s available power and strong connectivity to meet the co-location requirements of enterprises and end users in the area. Mr William Tay, chief executive and executive director of the Reit manager, said: “We expect our enlarged data centre portfolio valued at $1.5 billion to contribute a continuous income stream towards our overall distribution per unit (DPU) growth.”

Assuming the acquisition was completed on Jan 1, 2022, the manager estimated the transaction to improve the Reit’s DPU for financial year 2022 by approximately 0.11 cent or 0.7 per cent.

If the acquisition had been completed on June 30, 2023, this would increase the proportion of data centre properties of the Reit’s total investment properties from about 7 per cent to 9 per cent on a pro forma basis, the manager added.

The manager said the total acquisition cost of £128.1 million will be financed with a combination of debt financing, together with proceeds from its equity fund raising announced on May 16. Out of gross proceeds of about $500 million, some $129.9 million, or 26 per cent, was utilised to partially fund the acquisition.

At the time when the fund raising was announced, the Reit’s manager allocated this portion of the proceeds to partially fund “a potential acquisition of an asset in a key gateway city in Europe”. Units of CapitaLand Ascendas Reit closed 0.7 per cent or two cents up at $2.71 on Thursday. 

Source: The Straits Times