Storage and information management services Iron Mountain (NYSE: IRM) has announced that it has sold a portfolio of five facilities to Intermediate Capital Group (ICG) (LON: ICP), generating gross proceeds of approximately $178 million, based on current exchange rates.

The transaction, totalling 550,000 square feet, is a sale-leaseback transaction with the properties located in the greater London area.

Iron Mountain explained it will remain in these facilities under an initial twelve-year lease term, with options to renew up to an additional 20 years.

This transaction is part of Iron Mountain’s ongoing capital recycling program, and Iron Mountain expects to utilise the proceeds to reinvest in higher growth areas of its business.

ICG was advised by their asset management partner Marchmont Investment Management and CBRE. Iron Mountain was advised by JLL.

Barry Hytinen, executive vice president and CFO at Iron Mountain, said: “With our strong development pipeline together with highly attractive market valuations for industrial assets, we are pleased to continue our capital recycling program.

“The sale-leaseback of these assets allows us to generate significant investable proceeds while essentially maintaining long-term control of the facilities. On a leverage neutral basis, we estimate this transaction will generate nearly $140 million of capital, which we intend to invest in higher-growth areas, including our data centre business.”

Chad Brown, Director at ICG, added: “The Iron Mountain portfolio is a prime example of the mission-critical real estate that ICG’s Sale and Leaseback fund is seeking to invest in.

“This represents the fund’s third transaction in 2021 and second transaction in the UK, following the 2.94m sq ft forward funding of Jaguar Land Rovers new facility at Mercia Park, earlier this year.”