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Mapletree Industrial Trust acquires remaining 60% interest in 14 data centres in US

By Valerie Kor

/ EdgeProp Singapore |

June 23, 2020 4:00 PM SGT

SINGAPORE (EDGEPROP) - Mapletree Industrial Trust Management has announced that Mapletree Industrial Trust’s (MIT) trustee DBS Trustee has entered into agreements for the proposed acquisition of the remaining 60% interest in the 14 data centres currently held by Mapletree Redwood Data Centre Trust (MRDCT) in the US. The purchase consideration is US$210.9 million, or approximately $299.5 million.

MIT currently holds a 40% interest in MRDCT. The remaining 60%, valued at US$494 million or $701.5 million, is held by Mapletree DC Ventures, a wholly-owned subsidiary of Mapletree Investments. After acquisition, MIT will hold 100% interest in the 14 data centres. The agreed property value of the 14 data centres held by MRDCT on a 100% basis is US$823.3 million.

CEO of Mapletree Industrial Trust Management Tham Kuo Wei says that the acquisition “will improve MIT’s income stability with the increased freehold land component and long leases with annual rental escalations”. The acquisition will also increase the trust management’s exposure to the resilient data centre segment and deepen its presence in the US.

According to a press release by MIT, the proposed acquisition is in line with the manager’s strategy to grow the hi-tech buildings segment. MIT’s assets under management will increase to $6.6 billion after the acquisition, from $5.9 billion as at March 31. The hi-tech buildings segment will account for about 59.9% of total assets, as compared to 55% as at March 31.

The data centre market — insourced and outsourced — is projected to grow at a compound annual growth rate of 2.2% from 2018 to 2024. The US will account for about 28% of the global market by net operational square feet.

Data centres have also proved to be a resilient asset class during the pandemic as they are deemed as essential infrastructure in the US. Data creation, data storage and cloud computing will continue to grow due to the increasing trend of remote work, video streaming and online gaming, which will drive demand for data centre space.

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