Ascendas Reit to acquire 11 data centers in Europe for S$904.6 million

Ascendas Reit to acquire 11 data centers in Europe for S$904.6 million

Ascendas Funds Management, the Ascendas Real-Estate Investment Trust manager, has reportedly announced the Proposed Acquisition of a portfolio of 11 data centers situated across Europe for a sum of S$904.6 million from subsidiaries of Digital Reality Trust, Inc.

The 11 data centers are located across France, United Kingdom, Switzerland, and Netherlands, with an overall net lettable area of 61,637 sq. meters. While six data centers are built upon freehold land, the rest of the five are situated on leasehold land, having a weighted average lease to expiry period of 42.9 years.

Following the acquisition of the data centers, Ascendas Reit will have owned 212 properties valued at over S$15.0 billion. These include 37 properties in Australia (S$2.1 billion), 96 properties in Singapore (S$9.0 billion), 30 properties in the U.S. (S$2.1 billion), and 49 properties in the UK/Europe (S$1.7 billion).

William Tay, the Fund Manager’s Executive Director and Chief Executive Officer, stated that the acquisition provides a unique opportunity for owning a portfolio of well-occupied data centers that are situated across major markets in Europe.

Tay further added that this is complementary to the company’s existing data center portfolio in Singapore and will enhance the contribution of the sector to S$1.5 billion or 10 per cent of investment properties under management. The company sees good potential in the data center business and will be persistent in sourcing and making further acquisitions when the opportunities arise, stated Tay.

By rental income, the target portfolio has an extensive weighted average lease to expiry of 4.6 years. Nearly 83 per cent of the leases have embedded annual rent escalations ranging between 1.0 per cent and 3.0 per cent, offering organic growth.

As on 31st December 2020, almost 58 per cent of the data centers by rental income is rented on a triple net basis where all outgoings of the property comprising tax, maintenance, as well as insurance are borne by the tenants.

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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for, spanning the verticals of business, finance, and technology.