Ascendas Reit to acquire European data centres for $904.6m

The company plans to acquire a total of 11 data centres.

Ascendas Reit has announced its intention to acquire a portfolio of data centres across Europe for $904.6m from subsidiaries of Digital Realty Trust, Inc.

The portfolio comprises 11 data centres located across the United Kingdom, the Netherlands, France, and Switzerland.

According to Ascendas Reit, the proposed acquisition will enlarge the company’s exposure to the resilient data centre asset class as they expect demand for data centres to grow due to increasing reliance on data and online applications as well as accelerating digitisation across industries.

“This acquisition gives us a unique opportunity to own a portfolio of well-occupied data centres located across key markets in Europe. It complements our existing data centre portfolio in Singapore and will increase the sector’s contribution to $1.5b or 10% of investment properties under management. We see good potential in the data centre business and will continue to source and make further acquisitions when the opportunities arise,” said Ascendas Funds Management Limited (S) CEO William Tay.

The total consideration of $904.6m is in line with the independent market valuations of the target properties, which amount to $905m.

Ascendas Reit is expected to incur an estimated transaction cost of $55.4m, which includes stamp duty, professional advisory fees, and acquisition fees payable to the Ascendas Funds Management (S) Limited, the manager of Ascendas Reit, in cash.

The total acquisition cost of $960m will be financed with the proceeds from the Equity Fund Raising announced on 10 November 2020, debt financing, and internal cash resources.