Principal raises $533m to invest in US data centres

10 June 2021 | Antony Savvas

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Principal Real Estate has sealed its first fund dedicated to developing and acquiring data centres in the US, being over-subscribed in raising $533 million from investors globally.

A total of 15 limited partners committed to the Principal Digital Real Estate Fund. The diverse group of investors included public and corporate pension funds, insurance companies, wealth managers, endowments and foundations from the US, Canada, Europe, Asia, Latin America and the Middle East.

The new fund will focus on “value-add acquisitions, the redevelopment of existing data centres that can be acquired at or below replacement cost” and the “development of high-quality, state-of-the-art data centre facilities” on a “ready-to-fit or turnkey basis”, said Principal Real Estate.

Geographically, capital will be invested across the primary US data centre markets, said Principal, including Dallas, Chicago, Phoenix, Northern Virginia, and Northern California, in addition to select secondary markets such as the Pacific Northwest, Atlanta, Austin/San Antonio, Southern California and the Northeast.

Principal Real Estate began investing in data centres in 2007, and says it has since committed over $1 billion in data centre acquisitions and developments, while also owning more than $1.1 billion in data centre REITs.

Principal Real Estate is the real estate division of Principal Global Investors. Earlier this year, the firm's European division appointed Paul Lewis as director of European data centres, as it prepared to expand in the region.