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The joint venture looks to acquire 10 Powered Base Building data centres from Digital Realty for US$557.3 million (S$774.2 million).
Mapletree Investments (Mapletree) has formed a 50:50 joint venture with Mapletree Industrial Trust (MIT) to acquire a portfolio of data centre in North America for US$1.368 billion (S$1.9 million).
The joint venture looks to acquire 10 Powered Base Building data centres from Digital Realty for US$557.3 million (S$774.2 million). It will also enter into a joint venture with Digital Realty to co-invest in three existing Digital Realty Turn-Key Flex hyper-scale data centres for US$810.6 million (S$1.126 billion).
Nestled on freehold land, the properties have a total net lettable area of 2.1 million sq ft. Six of the properties are in Northern Virginia (the world’s largest data centre market), while the remaining seven are in the top 10 North American data centre markets.
All properties are fully leased, with a long weighted average lease to expiry of 9.1 years by gross rental income. About 92.2 percent of leases have fixed annual rental escalations of two percent or more, while about 91.5 percent is taken from triple net leases in which all outgoings are shouldered by tenants.
Digital Realty will manage the 10 data centres for a one-year transition period, while continuing to manage the three Turn-key Flex hyper-scale data centres.
“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,” said Hiew Yoon Khong, group CEO of Mapletree.
MIT CEO Tham Kuo Wei noted that the proposed transaction “will enhance the sustainability of MIT’s returns to unit holders with the increased freehold land component and long leases with embedded rental growth”.
“This transaction and partnership with Digital Realty marks another significant milestone in expanding our presence in a sector with strong growth prospects,” he added.
Mapletree and MIT expect the Powered Shell Portfolio acquisition to be completed early next year, while the Turn-Key Portfolio joint venture is slated for completion in late 2019.
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