MIT data centre leases among assets sold by tenant in Chapter 11 process
Tan Nai Lun
A MAPLETREE Industrial Trust (MIT) tenant, which is in a Chapter 11 bankruptcy process in the US, has agreed to sell its assets, including all eight of its data centre leases held by MIT.
The tenant had entered into an asset purchase agreement with Brookfield Infrastructure Partners to acquire substantially all of the tenant’s and its affiliates’ assets, MIT’s manager said on Friday (Nov 17).
Six of the eight data centre leases will be assumed with no change to the terms, conditions, or rental rates under the existing lease agreements.
As for the other two leases, agreements to amend the existing terms have been executed. These leases accounted for around 0.3 per cent and 0.6 per cent, respectively, of the Reit’s monthly gross rental income.
The tenant was MIT’s fourth largest in its portfolio and accounted for around 3 per cent of its monthly gross rental income as at Sep 30.
The tenant currently occupies space in eight data centres located in North America within MIT’s portfolio. Seven data centres are held under the Mapletree Rosewood Data Centre Trust, a 50:50 joint venture between MIT and Mapletree Investments.
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The transaction with Brookfield is expected to be completed in the first quarter of 2024.
In June, MIT’s manager said one of the Reit’s tenants had initiated a pre-arranged court-supervised process under Chapter 11 of the United States Bankruptcy Code.
It noted that the tenant, a global co-location provider, had received a commitment for US$200 million in debtor-in-possession financing and intended to pay vendors.
The troubled tenant is understood to be Cyxtera, a Nasdaq-listed data centre operator.
Units of MIT closed 0.4 per cent or S$0.01 higher at S$2.27 on Friday, before the announcement.
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