Mapletree Industrial Trust plans acquisition of 29 US data centres for $1.7b

This could make MIT one of the largest owners of data centres among Asia Pacific REITs.

Mapletree Inidustrial Trust (MIT) has entered into a purchase and sales agreement with Sila Realty Trust to acquire 29 data centres across 18 US states.

Approximately priced at US$1.3b (around $1.78b), the acquisition could make MIT one of the largest owners of data centres among Asia Pacific real estate investment trusts (REITs).

“Data centres remain resilient with attractive growth opportunities, which are underpinned by the acceleration of digitalisation, cloud adoption and e-commerce during the pandemic. The New Portfolio will augment MIT’s portfolio with the increased freehold land component and long leases with embedded rental growth,” said Mapletree Industrial Trust Management CEO Tham Kuo Wei in a press statement.

The proposed acquisition is expected to complete in the third quarter of 2021.

The US is the world’s largest and most established data centre market, accounting for 28.7% of global insourced and outsourced data centre space.

Following the acquisition, MIT would gain a presence in 13 of the top 15 data centre markets in North America. It will also gain exposure to established markets such as Chicago, Los Angeles and Houston.

The acquisition will increase MIT’s assets under management to $8.6b from the $6.8b recorded as of 31 March. Data centres will increase to $4.6b from the $2.8b as of end March.

The data centres are 87.8% leased to 32 tenants, with a weighted average lease to expiry of 7.9 years. About 89.4% of these leases have annual rent escalations from 1.5% to 3.0%.

These 29 properties are predominantly sited on freehold land, with a total lettable area of 3.3 million square feet.