Global data center provider Digital Realty, has just announced the sale of a portfolio of 11 data centers in Europe to Ascendas Reit for a total of approximately $680 million.

The 11 data centers include four in the UK which was considered for £250.25 million (US$348.52 million), three in the Netherlands, three in France and one in Switzerland. Apart from the UK purchase price, the consideration for the remaining seven data centers was €276.85 million (US$330.22 million).

“This transaction represents an important step towards our goal of self-funding our growth and diversifying our sources of equity capital while shrinking our asset base and setting the stage for accelerating growth as the proceeds are redeployed into accretive investment opportunities,” said Digital Realty Chief Investment Officer Greg Wright.

“These 11 legacy assets are almost fully leased, and this portfolio sale enables us to harvest value from stabilized properties and reinvest the proceeds to fund the continued expansion of PlatformDIGITAL® in support of our customers’ needs around the world.”

The 11 data centers have a total net leasable area of 61,637 square meters. Six of the data centers are located on freehold land while the remaining five data centers are sited on leasehold land with a weighted average land lease-to-expiry of 42.9 years.

“This acquisition gives us a unique opportunity to own a portfolio of well-occupied data centers located across key markets in Europe,” said Mr. William Tay, Executive Director and Chief Executive Officer of Ascendas Funds Management (S) Limited.

“It complements our existing data center portfolio in Singapore and will increase the sector’s contribution to S$1.5 billion or 10% of investment properties under management. We see good potential in the data centre business and will continue to source and make further acquisitions when the opportunities arise.”

Ascendas Reit is managed by Ascendas Funds Management (S) Limited, a wholly owned subsidiary of Singapore-headquartered real estate group CapitaLand Limited.

The sales of the Eropean portfolio has now been completed and Digital Realty expects that proceeds from the transaction will initially be used to pay down debt and used to fund future investment activity.