European investment and asset management group Avignon Capital has acquired a data center in Amsterdam for €11.55 million ($12.7 million).

The facility purchased by the London-based firm is a 7,450 square meter building which is situated in Amsterdam-West, close to the A10 ringway that provides direct access to Schiphol Airport within 15 minutes.

Acquired from one of the largest providers of telecoms in the Netherlands, the telco remains on the facility as a core tenant, being serviced on a long-term lease.

 “We are pleased to have acquired this property at a time where supply for this kind of asset is limited but demand remains high in Amsterdam. This property benefits from a globally operating tenant, providing strong security of income. Coupled with the general backdrop being supportive of data center assets, we anticipate that this will provide attractive income returns,” said Jack Pearce, Investment Analyst at Avignon Capital.

According to Avignon, demand has been high in Amsterdam for data centers, driven by the continued draw-down of space and power, resulting from the local presence of large cloud services companies. The majority of Dutch data centers are located in Amsterdam and the Netherlands is considered to be one of the Tier 1 markets for European data centers alongside London, the company adds.

In July last year, the Amsterdam Metropolitan Area announced a suspension on the establishment of new data centers  in its municipality and adjoining Haarlemmermeer. Avignon has therefore considered its investment, a rare opportunity which features high demand and limited supply.

The company further said that the facility is a fully leased asset which benefits from annual CPI (Consumer Price Index) uplifts, translating to a valuable addition to its current Dutch portfolio.

Avignon Capital was advised by Westview Capital Advisers, Haagstate, The SLK, Savills and AC Nielson. The seller is Somerset Capital Partners, who was legally advised by SOLID. Attorneys.