CapitaLand Ascendas REIT adds fifth data centre to UK portfolio

CapitaLand Ascendas REIT adds fifth data centre to UK portfolio

CapitaLand Ascendas REIT (CLAR) has acquired a high-specification Tier III colocation data centre facility in the UK from a global data centre operator for £119.4 million (appr. S$199.9m).

The property is located in Watford, a large town situated in the North-West of London.  The property enjoys excellent connectivity to major transport hubs and is highly accessible from London. North-West London is a hotspot for data centre developers, providing an attractive option to the power-constrained and relatively high-cost central London region. 

The property is 80.0% occupied by five investment-grade tenants.  These tenants operate in various industries, including information and communications technology, retail, energy and financial services.  Three of the existing tenants have each been utilising the property for more than 10 years.

With the latest acquisition, CLAR’s data centre footprint in the UK will increase from four to five data centres.  By value of CLAR’s assets under management (AUM), this represents an increase of approximately 54% to S$569.8 million, with 96% of the investments in the UK located in London.

CLAR’s enlarged footprint in London further enhances its strategic presence in Europe’s FLAPD markets.  Within Europe, approximately 93% of our data centres by AUM (approximately S$875.2 million) are located in the FLAPD markets.

In total, CLAR’s data centre portfolio will be uplifted by about 15% to S$1.5 billion in terms of AUM, comprising 63% in Europe (approximately S$940.6 million) and 37% in Singapore (approximately S$557.6 million).

On a pro forma basis, assuming that the Acquisition was completed on 30 June 2023, the proportion of data centre properties will increase from about 7% to approximately 9% of CLAR’s total investment properties valued at S$17.2 billion.

William Tay, Chief Executive Officer and Executive Director of the Manager, said: “As the demand for cloud and digital services continues to rise, we are capitalising on favourable market dynamics to significantly scale up our presence in the data centre sector.  London ranks among the top three global data centre markets and is also Europe’s largest colocation data centre market.  This acquisition complements our data centres around London, deepening and boosting our data centre investments in the UK by 54% to S$569.8 million, as well as increasing our exposure in London to 96% of our investments in the UK.  Given its strategic location and Tier III specifications, along with its robust tenancy, the property will serve as a strong catalyst in delivering additional value to the REIT.  

We expect our enlarged data centre portfolio valued at S$1.5 billion to contribute a continuous income stream towards our overall DPU growth.”

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