MIT, Mapletree to buy 14 US data centres

The data centres, to be acquired from Carter Validus Mission Critical Reit, including the property in San Diego (left), sit on freehold land with a total net lettable area of about 2.3 million sq ft, and a portfolio occupancy of 97.4 per cent.
The data centres, to be acquired from Carter Validus Mission Critical Reit, including the property in San Diego (left), sit on freehold land with a total net lettable area of about 2.3 million sq ft, and a portfolio occupancy of 97.4 per cent.PHOTO: MAPLETREE INDUSTRIAL TRUST

Reit to own 40% of joint venture set up to handle $1b acquisition, with property group holding 60%

Mapletree Industrial Trust (MIT) has joined with Mapletree Investments to acquire 14 data centres in the United States for US$750 million (S$1.02 billion).

The data centres, to be acquired from Carter Validus Mission Critical Reit, sit on freehold land with a total net lettable area of about 2.3 million sq ft, and a portfolio occupancy of 97.4 per cent.

The space is leased to 15 tenants from a range of industries such as telecommunications, information technology and financial services, with an average lease to expiry (by gross rental income) of about 6.7 years, MIT said.

Under the joint venture agreement, MIT will hold a 40 per cent interest, while Mapletree Investments will hold 60 per cent.

In a statement yesterday, MIT said it expects to complete the acquisition in this quarter. At this point, contribution from data centres would rise from 6.7 per cent to 16 per cent of MIT's portfolio.

Also yesterday, MIT posted a distribution per unit (DPU) of three cents in the second quarter, up 6 per cent from 2.83 cents in the same period a year earlier.

Net property income in the three months to Sept 30 was $70.7 million, up 11.1 per cent, driven by takings from the build-to-suit (BTS) project for HP Singapore and pre-termination compensation of $3.1 million from Johnson & Johnson. This was partially offset by a lower portfolio occupancy.

  • AT A GLANCE

    REVENUE: $92.6 million (+9.9%)

    DISTRIBUTABLE INCOME: $54 million (+6.8%)

    DPU: 3 cents (+6%)

Distributable income rose 6.8 per cent to $54 million.

Excluding the pre-termination compensation of $3.1 million from Johnson & Johnson, DPU in the second quarter would have remained flat from a year earlier, at 2.83 cents. Earnings per unit was 3.01 cents, up from 2.76 cents in the second quarter last year.

Net asset value per unit was S$1.41 as at Sept 30, unchanged from March 30.

Average occupancy fell from 92.6 per cent in the prior quarter to 90.4 per cent in the second quarter, partly due to the short time gap between the completion of Phase Two of the build-to-suit project for HP Singapore and its lease commencement on Sept 1.

MIT's average passing rental rate fell 0.5 per cent from the previous quarter to $1.94 psf per month.

Mr Tham Kuo Wei, chief executive of MIT's manager, said: "The portfolio continues to face headwinds from the supply of competing industrial space and exit of tenants.

"Our focus will be on retaining tenants, while we expect the contribution from development projects, including the BTS development for HP, to be the main growth driver for the Singapore portfolio."

The counter closed up one cent or 0.51 per cent to $1.96 yesterday before the announcements were made.

A version of this article appeared in the print edition of The Straits Times on October 25, 2017, with the headline 'MIT, Mapletree to buy 14 US data centres'. Print Edition | Subscribe