By investing S$200 million in its fifth acquisition, CapitaLand Ascendas REIT expands its data centre presence in the UK with a two-story, high-specification Tier III colocation facility. This DPU-accretive new economy acquisition will boost CLAR's portfolio returns because it is situated in London, one of the top three data centre markets in the world and the biggest colocation data centre market in Europe. With this most recent acquisition, CLAR will have invested around 54% more in data centres in the UK, totaling S$569.8 million, with 96% of those investments focused in London.

Singapore, 17 August 2023 – CapitaLand Ascendas REIT Management Limited, as the manager (the "Manager") of CapitaLand Ascendas REIT ("CLAR"), is pleased to announce the completion of the acquisition of a high-specification Tier III colocation data centre facility (the "Property") from an unaffiliated global data centre operator (the "Vendor") (the "Acquisition"). The United Kingdom (the "UK") is home to the Property, which is located in Watford in North-West London. After deducting the agreed value of the property, which is £119.4 million (or approximately S$199.9 million[2]) (the "Agreed Value"), the purchase consideration for the acquisition is £125.1 million (or roughly S$209.4 million) (the "Purchase Consideration").

According to Mr. William Tay, Chief Executive Officer and Executive Director of the Manager, "We are using advantageous market dynamics to aggressively grow up our footprint in the data centre industry as the demand for cloud and digital services continues to rise. London is the largest colocation data centre market in Europe and one of the top three global markets for data centres. By extending and raising our data centre investments in the UK by 54% to S$569.8 million and increasing our exposure in London to 96% of our investments in the UK, this Acquisition completes our network of data centres in and around London.

Rationale and Merits of the Acquisition
1. Strategic FLAPD[3] location in London, UK to capture growing demand for cloud and digital services
By total operational capacity, the UK is the largest colocation data centre market in Europe. Major data centre providers are clustered around London, where about 80% of the data centre supply is found.

London stands out as the gateway city with the best connectivity in the European market. It has the most fibre connectivity possibilities in the UK and Europe, which makes it the best place for global peering traffic, low latencies, and network redundancy. As a result, customers are very interested in London for their cloud deployment, especially in the telecommunications, financial services, and cloud services industries.

2. Significantly expands CLAR’s data centre footprint in Europe
CLAR's data centre presence in the UK will grow from four to five data centres as a result of the most recent acquisition. This represents an increase of nearly 54% to S$569.8 million in value of CLAR's assets under management (AUM), with 96% of the UK investments being based in London.

The increased footprint of CLAR in London strengthens its strategic position in the FLAPD markets of Europe. Approximately 93% of our data centres in Europe, measured by AUM (or around S$875.2 million), are situated in FLAPD markets.

3. Resilient income stream with investment-grade tenants
Five investment-grade tenants occupy 80.0%[5] of the property. These tenants work in a variety of sectors, including retail, energy, financial services, and information and communications technology. Each of the current three renters has been using the property for over ten years.

Details of the Acquisition
Through its wholly-owned subsidiary Ascendas Reit (Europe Sub 3) Ltd, CLAR has completed the acquisition of the entire issued share capital of the Vendor's wholly-owned subsidiary, which is the legal owner of the Property, by entering into a Share Sale and Purchase Agreement with the Vendor today.

After deducting the Agreed Value of the Property of £119.4 million (or roughly S$199.9 million), the Purchase Consideration of £125.1 million (or approximately S$209.4 million) was agreed on a willing-buyer and willing-seller basis. The independent market appraisal of the Property is higher than the Agreed Value.

More information on this Website: https://www.capitaland.com/en/about-capitaland/newsroom/news-releases/international/2023/august/CLAR-completes-acquisition-of-fifth-data-centre.html