Mapletree Industrial Trust to buy US data centre for up to US$262.1m

MAPLETREE Industrial Trust (MIT) is proposing to acquire a data centre and office in the US state of Virginia for between US$200.6 million and US$262.1 million, subject to the calibration of terms.

MIT's manager said on Monday that it is targeting to complete the deal in the first quarter of 2021.

The real estate investment trust's (Reit) wholly-owned subsidiary has entered into a sale, purchase and escrow agreement with an unrelated third-party vendor.

The property, sitting on freehold land, is fully leased on a triple net basis with a balance lease term of more than five years to a multinational company with "strong credit standing", the manager said.

The purchase consideration was arrived after taking into account the independent valuations of the property. Cushman & Wakefield of North Carolina valued it at between US$205 million and US$266 million as at Aug 31, 2020, which are 2.2 per cent and 1.5 per cent higher than the purchase considerations respectively.

Including other fees and expenses, the total acquisition outlay for MIT is estimated to be between US$204.3 million and US$266.9 million. The manager intends to fund this using debt financing, proceeds from an equity fundraising and/or internal cash resources.

The manager said the proposed acquisition is in line with its long-term strategy of focusing on property segments with "future growth potential".

The deal will also increase the Reit's exposure to data centres - a resilient asset class with growth opportunities - while increasing its exposure to the US, said to be the world's largest data-centre market, according to the MIT manager.

Among other things, the proposed acquisition is expected to provide income stability and will be accretive to its distribution per unit based on pro forma historical impact.

"Due to confidentiality reason, additional details relating to the proposed acquisition will be released in due course upon finalisation of the purchase consideration," the manager noted.

MIT units were trading flat at S$3.12 as at 9.07am on Monday, following this announcement.