Mapletree Industrial Trust Enters Japan With $370M Osaka Data Centre Buy

Singapore’s Mapletree Industrial Trust plans to acquire a 10-megawatt data centre in downtown Osaka for JPY 52 billion ($370 million), marking the Temasek-backed REIT’s first investment in Japan.

SGX-listed MIT will acquire an effective interest of 98.47 percent in the Osaka property under a trust beneficial interest purchase and share agreement with Suma Tokutei Mokuteki Kaisha, an unrelated third-party vendor, the REIT’s manager said Thursday in a release.

Upon completion in the third quarter of 2023, the deal will expand MIT’s reach beyond Singapore, where it owns 85 properties, and North America, where the trust’s 56 assets include 13 data centres held through a joint venture with sponsor Mapletree Investments.

“The proposed acquisition offers a strategic opportunity to diversify our data centre presence into Japan, one of the most developed data centre markets in Asia Pacific,” said Tham Kuo Wei, CEO of the trust’s manager. “It will enlarge our presence in the resilient data centre sector, which continues to offer attractive growth prospects. The addition of a high-quality data centre with its long-term lease to an established data centre operator will provide a stable income stream and strengthen MIT’s tenant base.”

Fully Leased

The target property is a multi-storey data centre on 45,280 square feet (4,207 square metres) of land near Osaka’s central business district, with 143,500 square feet of gross floor area and 136,900 square feet of net lettable area. The leasehold has 67.3 years of remaining land tenure.

The construction and the first phase of fitting-out work were completed last November. The remaining three phases are to be completed in progressive stages, and the final phase will conclude in May 2025. The property is fully leased to an established data centre operator.

The trust’s manager said the acquisition will diversify MIT’s portfolio geographically, with Japan set to account for 5.5 percent of assets under management and North America and Singapore representing the remaining 47.6 and 46.9 percent respectively.

“We have reached another milestone in our portfolio rebalancing efforts with this accretive acquisition,” Tham said. “We will continue to pursue transactions in dynamic new markets beyond North America and Singapore and explore divestments of non-core assets to further improve portfolio resilience and growth prospects.”

Digital Boost

Post-acquisition, MIT’s portfolio will grow from S$8.8 billion to S$9.3 billion as data centres increase from 53.7 percent of AUM to 56.3 percent.

In its existing markets, one significant acquisition opportunity in the pipeline for MIT is the stake it does not already own in the $1.8 billion Rosewood US data centre portfolio, where the trust has the right of first refusal to buy the remaining 50 percent interest from its Temasek-owned sponsor, Mapletree.

The Rosewood portfolio comprises 10 powered shell facilities and three hyperscale assets across North America, currently owned by the trust and its sponsor through a 50:50 joint venture.

In 2021, MIT bought a portfolio of 29 US data centres from Florida-based Sila Realty Trust for S$1.8 billion. That was followed by a series of divestments in a bid to redeploy capital, including last year’s S$10 million sale of an under-occupied data centre in Michigan.