Singapore’s CapitaLand Ascendas REIT acquires fifth UK data centre for £119m

Singapore’s CapitaLand Ascendas REIT (CLAR) has acquired its fifth data centre in the UK, worth £119 million ($151 million).

The Tier III colocation data centre is located in Watford, North West London. The facility spans 25,000 sqm (269,097 sqft), with a total lettable area of 8,412 sqm.

Judging by images published by CLAR, the acquired data centre appears to be the Chess Building previously owned by Digital Realty, which has a capacity of 31MW.

At the end of June, the data centre had an occupancy rate of 80%, with five tenants. The tenants operate in various industries, including information and communications technology, retail, energy and financial services.

The total acquisition cost of the data centre comes in at £128.1 million ($163.2 million).

CLAR is expected to scale up its presence in the data centre sector amidst the rising demand for cloud and digital services.

“London ranks among the top three global data centre markets and is also Europe’s largest colocation data centre market,” said William Tay, Chief Executive Officer and Executive Director of CLAR.

The acquisition boosts CLAR’s data centre investments in the UK by 54% to a total of £328.8 million ($419.3 million). London represents 96% of CLAR’s total investment in the UK.

“Given its strategic location and Tier III specifications, along with its robust tenancy, the Property will serve as a strong catalyst in delivering additional value to the REIT,” added Tay.

Following the acquisition, CapitaLand Ascendas REIT’s data centre portfolio is valued at £865 million ($1.1 billion).

Why invest in the UK data centre market?

The UK is Europe’s largest colocation data centre market by total operational capacity, according to research by CBRE. Nearly 80% of data centre supply is concentrated around London, where major data centre providers are located.

London also has the highest number of fibre connectivity options in both the UK and Europe.

However, capacity is becoming increasingly scarce. CBRE projected that the vacancy rate by megawatt power in London will decline to 15.9% in 2023.

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