Digital Realty Trust has entered into a definitive share sale and purchase agreement to acquire a three-property data center portfolio located in the greater London area, referred to as the Sentrum Portfolio.
The Sentrum Portfolio comprises approximately 761,000 square feet across three data centers located in Woking, Watford and Croydon.
Sentrum is the name for a group which owns and operates six UK data centers including the three to be acquired by Digital Realty.
The purchase price of the Sentrum Portfolio will be approximately £715.9m (equivalent to $1.1 billion based on the June 25, 2012 exchange rate of 1.00 pound to $1.56).
The Company expects to fund the purchase price and related earn-out payments with available cash, borrowings under the Company's global revolving credit facility, a bridge loan facility and/or the sale of debt or equity securities. Subject to various closing conditions, the acquisition is expected to close on or about July 31, 2012 and may be shortened or deferred in limited circumstances.
"We believe the addition of these high quality, mission critical facilities to our operating portfolio will enable us to serve a wide variety of customers seeking institutional quality data center space in London, a highly strategic global data center market," said Michael F. Foust, CEO of Digital Realty.
"The portfolio is approximately 80% leased to a diverse roster of 21 tenants, including leading multinational financial institutions and global network providers, with a weighted average remaining lease term of approximately 8 years," said Scott Peterson, Chief Acquisitions Officer for Digital Realty. "In addition to the stable in-place income, there is a significant value-add opportunity to lease the balance of the portfolio's available space."
"We expect this transaction to be accretive to our 2012 Core FFO on a diluted per share and unit basis upon closing, excluding one time acquisition and financing costs, and plan to provide updated guidance for the year in our second quarter 2012 earnings announcement," added A. William Stein, CFO and Chief Investment Officer of Digital Realty.
The Company estimated the total square feet available for lease in the Sentrum Portfolio based on a number of factors in addition to contractually leased square feet, including available power, required support space and common area. The Company's estimate of the percentage of occupied rentable square feet in the Sentrum Portfolio may change based on the Company's experience operating the properties following the closing of the acquisition.