Digital Core REIT has acquired an additional 10 percent share in a data center in Osaka, Japan.
The interest has been acquired via Digital Core REIT's subsidiary, Digital CR Singapore 4 Pte. Ltd., for JPY 7,725 million (~$51.5m), from Mitsubishi Corporation.
The Osaka data center is a freehold facility with a 95 percent occupancy rent. It is comprised of 114,940 sq ft (10,678 sqm) of rentable space and is leased to "leading global cloud providers."
The data center is located at 6-chome, Ao-kita, Saito, Minoh-city, and is operated by Digital Realty as Digital Osaka 2 (aka KIX11). The facility was built in 2019 and offers 25.5MW of IT capacity.
Digital Core REIT also acquired a 10 percent interest in the data center in November 2023. With the latest acquisition, Digital Realty will own 50 percent of the data center, Mitsubishi 30 percent, and Digital Core REIT the remaining 20.
In order to fund the latest acquisition, Digital Core REIT completed an amendment to its multi-currency credit facilities on March 26, which enabled a $75m term loan for intermediate-term financing for its investments. This covered the 10 percent interest completed on March 29, 2024, and the 10 percent completed on November 1, 2023.
In addition, Digital Core REIT paid down some of its outstanding borrowings on US dollar-denominated term loans. In total, the REIT repaid $140m of variable rate debt previously outstanding.
“We would like to acknowledge the efforts of Citibank Global Markets, BofA Securities, Inc., and DBS Bank, Ltd. in their capacity as lead arrangers and bookrunners, which facilitated this series of successful financings,” said Dave Craft, CFO of Digital Core REIT Management Pte. Ltd., the manager of Digital Core REIT.
“We would also like to welcome Mizuho Bank Ltd. and recognize their efforts in arranging the new Yen-denominated term loan. Finally, we would like to extend our gratitude to the entire bank group, whose overwhelming support made this amendment possible, providing significant financial flexibility in support of our external growth strategy.”
Digital Realty and Mitsubishi formed a $1.8bn joint venture known as MC Digital Realty in 2017. Digital Realty’s existing data center in Saito, Osaka, and Mitsubishi’s Mitako facility in Tokyo were transferred to the JV; the JV now operates nine data centers across Tokyo and Osaka.
The KIXII facility is the JV's second in Osaka following the 8MW KIX10 (also known as Digital Osaka 1) launched in 2017. A third facility opened in 2021 alongside a new data center in Tokyo, with a fourth Osaka facility, known as KIX13, opening earlier this year.
Singapore-listed Digital Core REIT was set up by Digital Realty to hold a number of its stabilized data centers.
