US-based Digital Realty is putting the finishing touches on the IPO of a global data centre REIT with a view to raising $600 million, a capital haul that could overtake the recently-listed Daiwa House Logistics Trust as Singapore’s largest initial public offering this year.
At the offer price of $0.88 per unit, Digital Core REIT is set to rake in $235 million from the public offering and $365 million from the issuance of cornerstone investor units, according to a prospectus filed with the Monetary Authority of Singapore on Monday.
With Digital Realty, the world’s biggest data centre trust, subscribed for $377 million worth of sponsor units, the REIT’s manager intends to raise gross proceeds of $977 million.
“Digital Core REIT is the only pure-play data centre Singapore REIT sponsored by a global best-in-class pure-play listed data centre owner and operator, Digital Realty,” the REIT’s manager said.
Catching Up to Daiwa House
Digital Core REIT is scheduled to list on the Singapore Exchange next Monday, coming on the heels of Daiwa House Logistics Trust, which began trading last Friday after the Japan-focused industrial REIT’s IPO was reportedly 4.5 times subscribed for the international placement and 9.5 times subscribed for the Singapore public offering.
DHLT had sought to raise S$575.5 million ($423 million) from the public offering that closed last Wednesday, including S$540 million from the public offering and the issuance of sponsor Daiwa House’s subscription units and the cornerstone investors’ units, plus S$35.5 million from the issuance of perpetual securities.
That would make DHLT’s debut the biggest IPO on the Singapore Exchange since materials maker Nanofilm Technologies International raised $346 million in October 2020, Bloomberg reported.
North American Launch Pad
Digital Core REIT’s initial portfolio comprises 10 freehold data centres in key markets of the US and Canada with an appraised valuation of $1.4 billion and a net rentable area of 1.2 million square feet (111,484 square metres). The facilities are fully leased to a roster of blue-chip customers, each with numerous deployments across Digital Realty’s global platform.
The seed assets include four data centres in Silicon Valley, two in Los Angeles, three in northern Virginia and one in Toronto. The largest chunk of the portfolio is in the server-hosting hotbed of northern Virginia, near Washington DC, with an appraised value of $629 million and 494,000 square feet, and in Silicon Valley, with those assets valued at $479 million and spanning 414,000 square feet.
Texas-based Digital Realty plans to co-invest with Digital Core REIT for all future acquisitions, with the REIT holding 90 percent of each asset and the sponsor taking 10 percent. In the event that Digital Realty chooses not to co-invest, Digital Core REIT may acquire 100 percent of an asset or invest alongside a third party.
The REIT’s cornerstone investors include AEW Asia, AIA Investment Management, Blackrock, DBS Bank and JP Morgan Asset Management, among others.