If the 14 data centers bought by Singapore’s Mapletree Industrial Trust wasn’t enough, the real estate investment trust has agreed to buy another US data center for up to $262 million.
The acquisition of the Virginia-based data center is expected to be completed in the first quarter of 2021, Mapletree said in a statement.
The data center is fully leased on a triple net lease basis, meaning that the tenant is responsible for the maintenance and insurance costs of the facility as well as certain property-related taxes.
The tenant is said to be a ‘multinational company with a strong credit standing’, which has a lease term of more than five years.
The data center was valued by Cushman & Wakefield at between US$205 million (S$278.8 million) and US$266 million (S$361.8 million). Under the agreement, Mapletree will purchase the property for between US$200.6 million (S$272.8 million) and US$262.1 million (S$356.5 million).
The acquisition is in line with Mapletree’s investment strategy to acquire data centers globally beyond Singapore, as the Trust expects global demand for insourced and outsourced data centers to grow at an annual rate of 2.2%.
Cloud computing is also predicted to grow at a CAGR of 14% until 2024, with an accelerated growth due to the COVID-19 pandemic.
“The COVID-19 pandemic has provided favourable tailwinds for the data centre segment,” said Mapletree.
The Trust has seen strong leasing demand for data center space from content, social media, e-payment, Software-as-a-Service and other information technology firms during the pandemic. Mapletree also justified their strategy by recognising that data centers were seen as essential infrastructure throughout the pandemic.
Upon completion of the sale, Mapletree’s assets under management will increase from US$4.8 billion (S$6.6 billion) as of 30 June 2020 to $5.06 billion (S$6.9 billion).
The Trust’s data center portfolio accounting for their total assets will rise from 38.5% as of 30 June 2020 to 41%, with 35% of its data centers located in North America.
Back in August 2020, Mapletree sold their Singapore data center to Equinix for US$91.2 million (S$125 million), which gave Mapletree the ability to fund other investments, reduce existing debt or make distributions to unit holders.
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