SINGAPORE — Keppel DC REIT entered into an agreement to acquire a data center located in Bracknell, United Kingdom, which is part of the Greater London urban area. The property has been acquired from a Fiera Real Estate/SEDCO Capital joint venture and marks Keppel’s second acquisition in the fast-growing, Great London data center hub and its third in the U.K.
Situated on a 4.7-acre plot of freehold land with a gross floor space of 94,867 square feet, the property, which will be named London Data Centre, consists of three interlinked two-story buildings that house data center space along with ancillary office space. The property has been independently valued by Newmark Valuation & Advisory LLC. The property is fully leased on an existing triple-net lease on a shell and core basis to a leading telecommunications company until 2039.
Bracknell is a thriving commercial center in the Thames Valley, a region known as the Silicon Valley of the U.K. due to its large concentration of multinational technology companies and conglomerates. London Data Centre is strategically located near Bracknell’s town center, 32 kilometers from London Heathrow Airport, and 55 kilometers from Central London.
“We are pleased to strengthen our presence in London, a top global data center hub, with the acquisition of a data center with a long leaseback period to a strong tenant,” said Anthea Lee, CEO of Keppel. “Our acquisition of London Data Centre reflects our judicious criteria for identifying and evaluating potential high-quality assets in key data center hubs and other prime locations, with strong tenancies that yield stable and regular income.”
The U.K. is the fourth largest data center market globally, and London has seen healthy demand from hyperscalers and cloud providers expanding around the western corridor, according to CBRE. The western corridor covers regions westwards of London toward Reading, including Slough and Bracknell. New data center demand in London is estimated to grow at a compound annual growth rate of 14.2% between 2020 and 2024.
The acquisition is expected to be accretive to Keppel’s distribution per unit. Post-acquisition, the company will increase the proportion of its shell and core data center leases from approximately 18.3% to 20.9% (by assets under management).