Digital Realty Trust, LP (NYSE listed) has entered into a sale and contribution agreement with Digital Core REIT (Singapore listed) in respect of interests in two datacenters for up to USD 681 million.
The transaction is structured as a sale of shares in the Dutch holding entity holding the German datacenter, as well as a contribution of an interest in a US holding entity holding the US datacenter, whereby these entities will be structured as joint ventures between (subsidiaries of) Digital Realty Trust and Digital Core REIT.
There are two potential scenarios regarding which facilities Digital Core REIT will ultimately acquire, and what proportion of those facilities, depending on whether Digital Core REIT raises capital through equity fundraising to partially finance the transaction.
If the transaction is funded by external bank borrowings without equity fundraising, Digital Core REIT will acquire a 25% (USD 140 million) in only the German data center.
If the deal is funded by external bank borrowings and equity fundraising, Digital Core REIT it will acquire an 89.9% interest (USD 502 million) in the German facility, as well as a 90% interest (USD 179 million) in a data center located in Texas, for a combined consideration of USD 681 million.
Completion is subject to, among other conditions, approval by Digital Core REIT's shareholders.
Digital Core REIT consummated its IPO at the Singapore stock exchange in 2021 as a spin-off by Digital Realty Trust, with Digital Realty Trust retaining a minority interest in Digital Core REIT.