Digital Realty sells 11 European data centres to Ascendas Reit for $678m

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Digital Realty (NYSE: DLR) has completed the sale of a portfolio of 11 data centres in Europe to Ascendas Reit, a CapitaLand sponsored REIT.

The deal would be the REIT’s first data centre investment in Europe as it takes over four facilities in the UK, three in the Netherlands, three in France and one data centre in Switzerland.

The consideration for the four data centres in the UK was £250.25 million and the consideration for the seven data centres on the continent was €276.85 million, for a total of approximately $680 million. 

The company said the portfolio is expected to generate 2021 net operating income of approximately $43.5 million.

Post-transaction, 60% of Ascendas Reit’s investment properties are in Singapore, 14% in the US, 14% in Australia and 12% in the UK and Europe.

"This transaction represents an important step towards our goal of self-funding our growth and diversifying our sources of equity capital while shrinking our asset base and setting the stage for accelerating growth as the proceeds are redeployed into accretive investment opportunities," said Digital Realty Chief Investment Officer, Greg Wright. 

"These 11 legacy assets are almost fully leased, and this portfolio sale enables us to harvest value from stabilized properties and reinvest the proceeds to fund the continued expansion of PlatformDIGITAL in support of our customers' needs around the world."

The acquisition is anticipated to diversify the Singapore-based Real Estate Investment Trust’s portfolio. Digital Realty expects proceeds from the transaction will initially be used to pay down debt and will ultimately be used to fund future investment activity. 

CBRE served as an advisor to Digital Realty and White & Case served as Digital Realty's legal advisor on the transaction.