The year end IPO rush has picked up with yet another IPO filed. On Nov 22, Digital Core REIT, which owns a portfolio of data centres, filed to go public at an indicative price of 88 US cents per unit. With a total of some 267 million shares to be sold, this issue is likely to be raising around US$235 million ($320 million).
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This REIT’s sponsor is Digital Realty, a leading data centre developer and operator. Digital Core REIT will be the exclusive S-REIT vehicle sponsored by Digital Realty.
It will have an initial portfolio of 10 freehold data centres in US and Canada with an appraised value of US$1.4 billion.
The REIT is projecting a distribution yield of 4.75% for forecast year 2022 and DPU growth of 5.26% from forecast year 2022 to projection year 2023.
As at listing date, the REIT’s gearing is around 27%, which is below its peers. At this level, it will have indicative debt headroom of US$160 million, US$424 million and US$596 million at gearing levels of 35%, 45% and 50% respectively to fund further investments.
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The sponsor plans to co-invest future assets by taking a 10% stake and Digital Core REIT the remaining 90%.
The Cornerstone Tranche of US$365 million or 414.8 million units comprises 60.8% of the total IPO Size. There are 26 cornerstone investors. They are in alphabetical order:
1 AEW Asia Pte. Ltd.
2 Affin Hwang Asset Management Berhad
3 AIA Investment Management Private Limited
4 AMP Capital Investors Limited
5 B&I Capital AG
6 Blackrock, Inc.
7 Cohen & Steers Asia Limited
8 DBS Bank Ltd.
9 DBS Bank Ltd. (on behalf of certain wealth management clients)
10 DWS Investments Australia Limited
11 Eastspring Investments (Singapore) Limited (in its capacity as investment manager for and on behalf of the investment accounts)
12 FIL Investment Management (Hong Kong) Limited
13 Fullerton Fund Management Company Ltd
14 Ghisallo Master Fund LP
15 Jane Street Financial Limited
16 JPMorgan Asset Management (UK) Limited (for and on behalf of its clients)
17 Kasikorn Asset Management Company Limited
18 Lion Global Investors Limited
19 Nikko Asset Management Asia Limited
20 Principal Global Investors (Singapore) Limited
21 Resolution Capital Limited
22 Schonfeld IR Master Fund Pte. Ltd. and Schonfeld Global Master Fund LP
23 Stichting Depositary APG Tactical Real Estate Pool, As Depositary Of APG Tactical Real Estate Pool
24 The Segantii Asia-Pacific Equity Multi-Strategy Fund
25 TMB Asset Management Company Limited
26 Value Partners Hong Kong Limited
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Digital Core REIT's market cap at IPO is expected to be around US$990.3 million.
Photo by Lars Kienle on Unsplash
