SINGAPORE (June 23): The manager of Mapletree Industrial Trust (MINT) announced that it will be acquiring the remaining 60% interest in the 14 data centres in the US currently held by Mapletree Redwood Data Centre Trust (MRDCT) at a purchase consideration of US$210.9 million (S$299.5 million).
The agreement was signed by MINT’s trustee, DBS Trustee Limited on Tuesday.
The agreed property value of the data centres on a 60% basis is some US$494.0 million (S$701.5 million).
MINT currently holds a 40% interest in MRDCT with Mapletree DC Ventures, a wholly-owned subsidiary of Mapletree Investments Pte Ltd (MIPL) holding the remaining 60% interest.
Upon completion of the proposed acquisition, MINT will hold a 100% interest in the 14 data centres. Its assets under management will also increase to $6.6 billion from $5.9 billion as at March 31.
According to MINT, the proposed acquisition is in line with the manager’s strategy to grow the hi-tech buildings segment.
It is also expected to increase MINT’s data centres segment to 39.0% from 31.6% as at March 31, increasing the trust’s exposure to a resilient asset class with growth opportunities.
Data centres proved to be a resilient asset class during the Covid-19 pandemic, as it was considered essential in North America, and remained open when the country was in lockdown.
The hi-tech buildings segment will account for some 59.9%, from 55.0% as at March 31.
All 14 data centres are 97.4% leased to 15 tenants as at March 31. Tenants include Fortune Global 500 corporations, and companies listed on the NYSE and Nasdaq.
The MRDCT Portfolio has a weighted average lease to expiry of about 4.6 years, with about 20% of the leases expiring within the next three years. About 97.8% of the MRDCT Portfolio have annual rental escalations of 2% and above.
The 14 data centres are situated on freehold land that is strategically located in established data centre markets across the US. The centres come with a net lettable area (NLA) of some 2.3 million sq ft.
Following the completion of the proposed acquisition, MINT’s freehold properties will increase to 51.8% (by land area) from an estimate of 37.9% as at March 31.
The total acquisition outlay comes up to some US$218.0 million (S$309.6 million).
The manager of MINT says it intends to finance the total acquisition outlay through an equity fund raising and the issuance of the acquisition fee in units.
See: Mapletree Industrial Trust launches private placement to raise $350 mil to fund acquisition of data centres
The agreed property value of the MRDCT Portfolio of US$823.3 million (S$1.17 billion) represents a discount of 0.7% to the independent valuation by Newmark Knight Frank Valuation & Advisory, LLC and in line with the independent valuation by Cushman & Wakefield Western.
Both companies have valued the portfolio at US$828.7 million (S$1.18 billion) and US$823.3 million (S$1.17 billion) respectively.
“The Proposed Acquisition increases our exposure to the resilient data centre segment and deepens our presence in the United States,” says Tham Kuo Wei, CEO of the manager.
“The United States is the largest and most established data centre market in the world. It offers attractive growth prospects and is well supported by favourable supply-demand dynamics. The Proposed Acquisition will improve MIT’s income stability with the increased freehold land component and long leases with annual rental escalations,” he adds.
Units in Mapletree Industrial Trust closed flat at $2.84 on Monday.
