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Digital Realty-backed $1.4bn REIT to IPO in Singapore on Dec 6

Over 25 cornerstone investors are to finance the trust which will boast a data centre portfolio of 1.2 million square feet.

By João Marques Lima

Founder and Editor, The Tech Capital

2 Mins

December 03, 2021 | 2:23 AM GMT

Digital Core REIT, a new data centre infrastructure operator backed by Digital Realty Trust (NYSE: DLR) is to list on the Singapore Stock Exchange (SGX) on Monday, December 6, the company said in its prospectus.

The new trust will, at launch, be comprised of 10 freehold data centres in the US and Canada which will give the company an enterprise value of approximately US$1.4 billion.

Digital Core REIT expects to raise $600 million with its initial public offering (IPO), which would make it the largest debut in Singapore this year.

The company will issue 682 million units at $0.88 per a piece, excluding a greenshoe option worth $47 million.

Nearly 253.7 million units will be offered in the placement tranche to international investors outside of the US while close to 13.4 million units will be offered to retail investors in Singapore.

Digital Realty will own 428.8 million units, equivalent to 38.1% ownership.

The issue is posed to raise around $235 million and generate a distribution yield of 4.75% for forecast year 2022 and DPU growth of 5.26% from forecast year 2022 to projection year 2023.

Cornerstone investors have each also entered into separate subscription agreements at the offering price for a total of nearly 414.8 million units or $365 million, comprising 60.8% of the total IPO size.

Cornerstone investors amount to over 25 different institutions, including AMP Capital Investors, DBS Bank, JPMorgan, Nikko Asset Management Asia, Principal Global Investors (Singapore), and Blackrock, Inc.

The 10 facilities that will sit under Digital Core REIT are all currently 100% leased and located in Northern Virginia, Silicon Valley, Los Angeles, and Toronto. Combined, they provide a total net rentable area of 1.2 million square feet and 62MW od IT load.

Microsoft, Cyxtera, Meta/Facebook, IBM, Sungard Availability Services, and AWS represent the main tenants across the properties.

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João Marques Lima

Founder and Editor, The Tech Capital

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