Macquarie Technology Group Acquires Sydney’s North Data Centers from Keppel DC REIT for $174m

Sydney’s north has seen the transfer of two data centers from Keppel DC REIT to Macquarie Technology Group for A$174m (€120m). The acquisition includes the Intellicentre Campus in Macquarie Park, consisting of Intellicentre 2 and Intellicentre 3 East assets. Keppel DC REIT sold the property at a 35.4% premium to its valuation as of December 31, 2023.

Macquarie Technology Group CEO, David Tudehope, stated that acquiring the land and buildings at Macquarie Park provides long-term control of the campus, especially as they are expanding capacity by constructing IC3 SuperWest, a third building at the campus. The total acquisition cost of A$190m, including transaction costs and stamp duty, offers greater flexibility for future capital management and creates value over the long-term life of the assets.

To fund the acquisition, Macquarie Technology Group is raising A$100m through a two-tranche placement and a A$90m data center loan note. Keppel DC REIT will reinvest A$90m of the sale proceeds into the Macquarie loan note, known as Australia Data Centre note. This allows the trust to retain exposure to the Australian data center market and receive a regular income stream with CPI-linked annual escalation for 8.5 years.

Loh Hwee Long, CEO of Keppel DC REIT Management, emphasized that this divestment has realized value from their investment in Intellicentre Campus at an attractive premium. This strategic move showcases the evolving landscape of digital infrastructure and highlights potential for growth and collaboration within this industry.

In summary, Macquarie Technology Group has acquired two data centers in Sydney’s north from Keppel DC REIT for A$174m (€120m) in exchange for greater flexibility for future capital management and long-term value creation opportunities.

The purchase includes two data centers located on Sydney’s north coast: Intellicentre Campus in Macquarie Park (consisting of Intellicentre 2 and Intellicentre 3 East) was acquired by Macquarie Technology Group from Keppel DC REIT for $174 million (€120 million). The acquisition is valued at a premium compared to its initial purchase price by Keppel DC REIT.

Keppel DC REIT initially purchased these assets for $70 million in two transactions when it was first listed in 2015. With this acquisition by Macquarie Technology Group, they are gaining long-term control over their campus while also expanding capacity through construction projects such as IC3 SuperWest.

This transaction will allow them to achieve greater flexibility with future capital management while creating value over time through their investment strategy.

To fund this acquisition, Macquarie Technology Group is raising $100 million through a two-tranche placement and a $90 million data center loan note from Keppel DC REIT Management will reinvest $90 million of sale proceeds into this loan note.

Overall, this strategic move demonstrates how digital infrastructure markets can evolve over time with opportunities for growth and collaboration among industry players like Keppel DC REIT Management and Macquarie Technology Group.