CapitaLand Ascendas REIT completes acquisition of fifth UK data centre

CapitaLand Ascendas REIT completes acquisition of fifth UK data centre

Data Centre CLAR

Singapore firm spent S$200 million to grow its presence in the UK

CapitaLand Ascendas REIT (CLAR), announce today it has completed the acquisition of a high-specification Tier III colocation data centre facility in Watford, North-West London.

The total cost of the acquisition was approximately S$214.4mn which included a purchase consideration of S$199.9mn, an acquisition fee of S$2mn, stamp duty, professional and other fees and expenses of S$3mn.

The Total Acquisition Cost of S$214.4mn will be financed by a combination of debt and the proceeds from the equity fund raising announced by CLAR on 16 May 2023.

The seller was not revealed by CLAR.

“As the demand for cloud and digital services continues to rise, we are capitalising on favourable market dynamics to significantly scale up our presence in the data centre sector,” said William Tay, CEO and executive director of CLAR.

The acquisition brings CLAR’s total data centers in the UK to five, and has increased the value of their investment in UK data centres to S$569.8 million. 96% of its UK investment is based in London.

London stands out as the most interconnected gateway city in the European market. It boasts the highest number of fibre connectivity options in both the UK and Europe, making it an ideal location for peering traffic worldwide, low latencies, and network redundancies.

As such, London is highly sought-after by customers, particularly in the telecommunications, financial services and cloud services industries, for their cloud deployment.

The Property is 80% occupied by five investment-grade tenants. These tenants operate in various industries, including information and communications technology, retail, energy and financial services. Three of the existing tenants have each been utilising the Property for more than 10 years.

In total, CLAR’s data centre portfolio will be uplifted by about 15% to S$1.5 billion in terms of assets under management, comprising 63% in Europe (approximately S$940.6 million) and 37% in Singapore (approximately S$557.6 million).

“Given its strategic location and Tier III specifications, along with its robust tenancy, the Property will serve as a strong catalyst in delivering additional value to the REIT,” Tay concluded.

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