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Mapletree Industrial Trust’s acquiring of 29 data centres has a net lettable area of 3.3million sq ft, and will push to establish their presence in US markets. Source: Mapletree Industrial Trust
Mapletree Industrial Trust (MIT) has agreed to acquire 29 data centres in the US for US$1.32 billion (S$1.78 billion) from Sila Realty Trust.
MIT’s manager noted that the acquisition is aligned with its long-term strategy of increasing MIT’s portfolio of data centres.
The acquisition is expected to make MIT one of the biggest data centre owners among real estate investment trusts (REITs) listed within the Asia Pacific (by assets under management).
It will also see MIT establish “presence in 13 of the top 15 data centre markets in North America, with these markets accounting for about 64.2% of the North American data centres (by gross rental income)”.
Specifically, the acquisition will expand MIT’s data centre footprint to newly established markets, such as Los Angeles, Chicago and Houston.
The 29 properties, which have a combined net lettable area of 3.3 million sq ft, are predominantly located on freehold land.
Upon completion of the acquisition, MIT’s freehold properties will “increase to 65.8% of the enlarged portfolio (by land area) from 55.9% as at 31 March 2021”.
Mapletree Industrial Trust Management revealed that the portfolio is “87.8% leased to 32 tenants, including Fortune Global 500 corporations, NYSE / NASDAQ-listed companies and multinational companies with investment grade ratings”.
It has a weighted average lease expiry of 7.9 years, with 1.7% of leases expiring in the next three financial years. Around 89.4% of the leases “have annual rental escalations from 1.5% to 3.0%. They are primarily on triple net leases with all outgoings borne by the tenants”.
“The proposed acquisition marks a significant milestone in our expanded investment strategy since 2017 to include data centres beyond Singapore,” said Tham Kuo Wei, Chief Executive Officer of the Mapletree Industrial Trust Management.
MIT’s manager intends to fund the total acquisition outlay via proceeds from an equity fund raising and debt.
Set to be completed in Q3 2021, the acquisition is expected “to be distribution per unit and net asset value per unit accretive to MIT unitholders”.
Upon completion of the acquisition, MIT’s assets under management will climb to $8.6 billion from $6.8 billion as of 31 March 2021, while data centres will increase to $4.6 billion from $2.8 billion as of 31 March 2021.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg