Tham Kuo Wei, CEO of Mapletree Industrial Trust Management
Singaporean property group Mapletree has become the latest global investor to bet on building homes for data clouds, buying a portfolio of 14 US data centres for $750 million.
A joint venture of Mapletree Investments and Mapletree Industrial Trust (MIT), a listed trust managed by the Temasek Holdings-backed corporation, purchased the trove of server centres from Carter Validus Mission Critical REIT, a non-traded real estate investment trust sponsored by US commercial real estate firm Carter Validus.
The Mapletree joint venture is buying the properties through an unlisted single-purpose trust, Mapletree Redwood Data Centre Trust, in which Mapletree Investments holds a 60 percent interest and MIT holds the remaining stake, the group announced to the Singapore exchange.
The deal comes less than two weeks after Canada’s largest pension fund partnered with Mapletree’s fellow Temasek-backed conglomerate Keppel Group to invest $350 million in data centres across Asia Pacific and Europe.
Mapletree Bets on Big Data in the US
This data centre in Atlanta, Georgia is among the facilities Mapletree is picking up
“The Proposed Acquisition is in line with the expansion of MIT’s investment strategy to acquire data centres worldwide beyond Singapore,” commented Tham Kuo Wei, CEO of MIT’s manager in the statement. “The joint venture with the Sponsor is a prudent and measured approach for MIT’s first overseas investment in the United States, the largest data centre market in the world.”
The 14 purpose-built facilities have a total net lettable area of 2.3 million square feet (213,677 square metres) and are spread across nine states, including California, Georgia, Michigan, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin. The properties are 97.4 percent occupied with an average remaining lease term of 6.7 years.
Tham pointed out that the deal, to be completed this quarter, will boost the data centre contribution to MIT’s portfolio from 6.7 percent to 16.0 percent. The acquisition marks MIT’s first data centre venture outside of Singapore, where the listed, industrial-focussed trust holds 85 properties totalling S$3.78 billion ($2.78 billion) in value.
Temasek Twins Compete for Data Centre Deals
Data centres are becoming a hot commodity as worldwide demand for the high-tech facilities is expected to grow by an average of 5.3 percent per year between 2015 and 2020 in terms of floor space, according to Mapletree. The US is the world’s largest data market, accounting for some 28 percent of global demand, with mean annual growth of 3.1 percent expected over the same five-year period.
Mapletree’s move to go multinational with its server farm strategy follows soon after Temasek-backed stablemate Keppel Corporation announced a $1 billion data centre investment plan earlier this month.
As part of that fund-raising, Keppel’s real estate private equity unit, Alpha Investment Partners, and Keppel Data Centres Holdings received $350 million in backing from Canadian pension fund manager CPPIB to do their own data centre deals in Asia Pacific and Europe, with the option to invest a further $150 million.
The commitment by the pension giant to Alpha Data Centre Fund (ADCF) brought Keppel’s data centre war chest up to double the fund’s original target.
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