Mapletree tops nearly $5bn in assets under management with 14-data centre acquisition
Singapore-based Mapletree Industrial Trust Management Ltd. (MIT) Is increasing the value of its assets under management portfolio to US$4.74 billion with the acquisition of 14 US data centre facilities.
The firm’s trustee DBS Trustee Limited has entered into agreements for the proposed acquisition of the remaining 60% interest in the 14 data centres in the US currently held by Mapletree Redwood Data Centre Trust (MRDCT) at a purchase consideration of $210.9 million.
The agreed property value of the 14 data centres on a 60% basis is $494.0 million.
MIT holds a 40% interest in MRDCT, with Mapletree DC Ventures Pte. Ltd., a wholly owned subsidiary of Mapletree Investments Pte Ltd (MIPL), holding the remaining 60% interest. Upon completion of the proposed acquisition, MIT will hold a 100% interest in the 14 data centres.
Tham Kuo Wei, CEO of MIT, said: “The proposed scquisition increases our exposure to the resilient data centre segment and deepens our presence in the United States.
“The United States is the largest and most established data centre market in the world. It offers attractive growth prospects and is well supported by favourable supply-demand dynamics.
“The proposed acquisition will improve MIT’s income stability with the increased freehold land component and long leases with annual rental escalations.”
All 14 data centres are 97.4% leased to 15 established tenants, including Fortune Global 500 corporations and NYSE-listed/Nasdaq-listed companies.
The MRDCT Portfolio has a weighted average lease to expiry of about 4.6 years, with about 20% of the leases expiring within the next three years.
About 97.8% of the MRDCT Portfolio have annual rental escalations of 2% and above. They are primarily powered shell data centres on triple net leases with all outgoings borne by the tenants.
With a net lettable area of 2.3 million sq ft, the 14 data centres are sited on freehold land, which are strategically located in established data centre markets across the US.
Following the completion of proposed acquisition, freehold properties will increase from about 37.9% as at 31 March 2020 to 51.8% of the enlarged portfolio by land area.
According to 451 Research, the global insourced and outsourced data centre market is projected to grow at a compound annual growth rate of 2.2% from 2018 to 2024, with the US accounting for about 28% of the global market by net operational square feet.