Keppel DC REIT Adds to European Portfolio With $44M Dutch Data Centre Buy

Singapore-listed Keppel DC REIT has acquired a third data centre in the Netherlands, strengthening the trust’s foothold in a key server-hosting market and reinforcing the portfolio’s emphasis on European assets.

The REIT paid €37.2 million ($44.1 million) for the property consisting of two data centre buildings at De Hurk, the largest business park in the city of Eindhoven, a tech hub about 120 kilometres (75 miles) south of Amsterdam. The seller was a fund affiliated with MCAP Global Finance UK, the European subsidiary of US-based Marathon Asset Management.

The portfolio’s newest addition, dubbed Eindhoven Campus, joins existing assets in Amsterdam and Almere as 2020’s top-performing S-REIT grows its footprint in the Netherlands, the eighth-largest data centre market globally, the trust’s manager said Monday in a release.

“We are pleased to be able to add to our portfolio a quality and green data centre located in the key technology hub of Eindhoven,” said Anthea Lee, chief executive of the trust’s manager.

Fully Leased Asset

Including the two data centre buildings, a warehouse and an ancillary office building on site, Eindhoven Campus has a combined net lettable area of 83,841 square feet (7,789 square metres).

The property is fully leased and has a weighted average lease expiry of 6.8 years by leasable area and 8.5 years by rental income. The data centre space is leased to an undisclosed client described as “a global leading IT services provider”.

The market value of the asset was €35.4 million before the transaction, which was funded with debt and the proceeds from a recent equity fund-raising. Post-acquisition, the portfolio’s occupancy rate and WALE remain virtually unchanged at 98.1 percent and 6.5 years.

Keppel DC REIT was launched in 2014 with seed assets including five properties in Asia Pacific and three in Europe. The addition of the Eindhoven campus, together with the pending acquisition of a facility in China’s Guangdong province and the planned disposal of a data centre in Brisbane, will bring the portfolio’s asset total to 10 each in APAC and Europe.

Continental Expansion

The Netherlands’ data centre market is expected to grow by a compound annual rate of 5.3 percent over the period of 2021 to 2026, according to research by US consultancy Arizton. The country’s advantages include direct links to various transatlantic submarine cables and the presence of two of the largest internet exchanges in the world, the Amsterdam Internet Exchange and the Neutral Internet Exchange.

In a March report, CBRE forecast record-breaking demand for European co-location capacity in 2021, driven by hyperscalers and internet giants, with demand to remain elevated in 2022 and 2023. A new high of 415 megawatts in fresh supply is scheduled to come online this year across the key markets of Frankfurt, London, Amsterdam and Paris, the property services firm said.

Aside from the Dutch properties, Keppel DC REIT’s European portfolio comprises two assets in Germany (both in Frankfurt), two in the UK (one in London), two in Ireland and one in Italy.

Another SGX-listed trust, Ascendas REIT, announced in March that it was acquiring an 11-asset European data centre portfolio, including properties in the UK, the Netherlands, France and Switzerland, from US-based Digital Realty Trust for $671.7 million.