Iron Mountain sells five UK storage facilities for $178m
Iron Mountain has sold five London facilities to Intermediate Capital Group (ICG), raising $178 million under a sale-leaseback transaction.
The five facilities in the greater London area total 550,000 sq ft of space. Iron Mountain will remain in the facilities under an initial 12-year lease term, with options to renew for up to an additional 20 years.
Iron Mountain has not confirmed which data storage and management facilities are covered by the deal.
“This transaction is part of Iron Mountain’s ongoing capital recycling programme and we expect to utilise the proceeds to reinvest in higher growth areas of our business,” said Iron Mountain.
London Stock Exchange-listed ICG is a global alternative asset manager with $56.2 billion of assets under its control, including private debt, credit and equity, principally in closed-end funds.
Chad Brown, director at ICG, said: “The Iron Mountain portfolio is a prime example of the mission critical real estate that ICG’s sale and leaseback fund is seeking to invest in.
“This represents the fund's third transaction in 2021 and second transaction in the UK, following the 2.94 million sq ft forward funding of Jaguar Land Rover's new facility at Mercia Park earlier this year.” The Jaguar Land Rover deal was worth around £330 million.
Barry Hytinen, executive vice president and CFO at Iron Mountain, added: “With our strong development pipeline together with highly attractive market valuations for industrial assets, we are pleased to continue our capital recycling programme.
“The sale-leaseback of these assets allows us to generate significant investable proceeds while essentially maintaining long-term control of the facilities.
“On a leverage neutral basis, we estimate this transaction will generate nearly $140 million of capital, which we intend to invest in higher growth areas - including our data centre business,” said Hytinen.
Incidentally, ICG says it still has £500 million in its sale and leaseback fund available to invest in the UK and continental Europe, so other data-related deals could potentially be on the cards.
This article was updated on 30 June to clarify that the sale and lease-back deal involved storage facilities and not Iron Mountain's data centres. In addition to its data centres, Iron Mountain offers record, document, and tape storage facilities as well as customised vaults.