Singapore’s Mapletree Acquires US$557m Data Centres from Digital Realty

Digital Realty, a global provider of data centre, colocation and interconnection solutions, has announced it has closed the previously announced sale of a portfolio of 10 Powered Base Building data centres to Mapletree Investments and Mapletree Industrial Trust (MIT).

Mapletree acquired the Powered Base Building portfolio from Digital Realty for a total purchase price of approximately $557 million, subject to customary closing costs and transaction fees.

These 10 properties are fully leased and are expected to generate 2020 cash net operating income of approximately $37 million, representing a 6.6 per cent cap rate.

Digital Realty supports the data centre, colocation and interconnection strategies of customers across the Americas, EMEA and APAC, ranging from cloud and information technology services, communications and social networking to financial services, manufacturing, energy, healthcare, and consumer products.

The company said it will provide transitional property management services for the Powered Base Building portfolio for one year from the closing date at a customary market rate.

“We are pleased to have closed the second tranche of our transaction with Mapletree, which represents an important step towards our goal of self-funding our growth and diversifying our sources of equity capital, while setting the stage for accelerating growth as proceeds are redeployed into accretive investment opportunities,” said Digital Realty Chief Executive Officer A. William Stein.

The partnership is aimed at collaborating with Mapletree as joint venture partners and exploring additional opportunities together worldwide, Stein added.

Citigroup served as lead financial advisor to Digital Realty, along with CBRE who served as co-advisor. Latham & Watkins and Mayer Brown served as Digital Realty’s legal advisors.

Mapletree Investments Pte Ltd is a leading real estate development, investment, capital and property management company headquartered in Singapore.

MIT, on the other hand, is a REIT listed on the Main Board of Singapore Exchange. It invests in a diversified portfolio of real estate used primarily for industrial purposes, whether wholly or partially in Singapore, as well as real estate-related assets.

MIT’s portfolio includes flatted dactories, hi-tech buildings, business park buildings, stack-up/ramp-up buildings, and light industrial buildings.