21 February 2018
SCHRODER EUROPEAN REIT ACQUIRES NETHERLANDS DATA CENTRE FOR C. €20MN
Schroder European Real Estate Investment Trust plc ("SERE"), the company investing in European growth cities, has completed the acquisition of a data centre in Apeldoorn, the Netherlands, for approximately €20 million. The acquisition reflects an attractive net initial income yield of 10%. SERE has now fully deployed all of its capital currently available for investment in a ten asset portfolio, located in growth cities and regions that are benefiting from the favourable Eurozone economic outlook.
The 23,700 sqm mixed use building's primary usage is a data centre, with additional office and storage space. The building was extensively refurbished in 2006 and 2015 and includes 495 parking spaces. It is let to a strong covenant, KPN NV, a leading Dutch telecom and IT service provider, with an initial term expiring 31 December 2026 and subject to annual indexation.
Apeldoorn is strategically located in the centre of the Netherlands, at the intersection of the North-South and East-West motorway axis. Just 75km from Amsterdam, it is expected to be a beneficiary of the growing trend of back-office relocation by information and communications technology businesses (ICT), with rents currently 30% of those in Amsterdam and a deep IT related employment pool.
Supporting SERE's growth cities strategy, GDP for the Apeldoorn region is forecast to grow at 1.6% over the next four years1, ahead of domestic GDP growth. Its population growth has seen a steady upward trend since the 1960s, outperforming a number of other similarly sized cities over the same period.
Apeldoorn represents the tenth acquisition by SERE, which has now invested approximately €235 million at a blended net initial yield of approximately 6.5%, in established Western European growth cities.
Jeff O'Dwyer, Fund Manager at Schroder REIM, commented:
"This acquisition demonstrates our ability to leverage Schroders' in-country investment expertise and identify assets that fit with our investment strategy, being accretive to income and offering a number of value-enhancing asset management initiatives, in fast-growing European cities and growth industries.
"Following the announcement that Casino Group has exercised an option to buy back two of our low yielding retail assets at a 10% premium to valuation, we are now working on opportunities to redeploy this capital when the sale completes in July 2018. With a robust pipeline in place and a favourable market backdrop, we look forward to the rest of 2018 with confidence."
Enquiries:
Duncan Owen/Jeff O'Dwyer
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
FTI Consulting
Dido Laurimore/Richard Gotla/ Ellie Sweeney Tel: 020 3727 1575
1 Source: Oxford Economics, December 2017
