Schroder European Real Estate Investment Trust (“SERE”) has completed the acquisition of a data centre in Apeldoorn, the Netherlands, for approximately €20m. 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 growing cities and regions that are benefiting from the favourable Eurozone economic outlook.
The 23,700 m² 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.
Apeldoorn represents the tenth acquisition by SERE, which has now invested approximately €235m 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.”
