Digital Realty closes $1bn deal with Mapletree Investments

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Digital Realty has closed its $1 billion joint venture agreement with Mapletree Investments and Mapletree Industrial Trust.

The news follows a previous announcement made in September when the company announced that along with the sale of 10 data centres it was also establishing a joint venture on three existing Turn-Key Flex hyperscale data centres worth a combined total of $1.4 billion. However, this part of the deal values the three fully stabilised hyperscale facilities at approximately $1 billion. 

The three facilities are fully leased and are expected to generate 2020 cash net operating income of approximately $61 million, representing a 6.0% cap rate.  Digital Realty is keeping a 20% ownership interest in the joint venture, and Mapletree has closed on the acquisition of the remaining 80% stake for approximately $811 million.  Digital Realty will continue to operate and manage these facilities, meaning that the transaction will be completely seamless from a customer perspective.

The second part of the Mapletree transaction, which is the sale of 10 fully-leased Powered Base Building properties for $557 million, is expected to close in early 2020. All 10 properties are fully leased and predicted to generate a cash net income of close to $37 million in 2020, representing a 6.6% capital rate.

In related news, Digital Realty recently announced that it has entered into a definitive agreement to acquire Interxion for $8.4 billion, creating a leading pan-European data centre presence.

Under the terms of the agreement, Interxion shareholders will receive a fixed exchange ratio of 0.7067 Digital Realty shares per Interxion share. The transaction values Interxion at approximately $93.48 per ordinary share or approximately $8.4 billion of total enterprise value.

Digital Realty’s CEO William Stein will lead this newly formed company serving as its CEO. Additionally, Digital Realty’s EMEA managing director Jeffrey Tapley will work jointly with Ruberg on the integration of Interxion's and Digital Realty's businesses.