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Singapore property investor snaps up BT’s Cardiff datacentre for £34m

Keppel DC REIT acquires site on Celtic Gateway business park that has three data halls capable of housing 12,000 servers

Singapore-based property investment company Keppel DC REIT has acquired a datacentre in Cardiff, occupied by telco giant BT, for £34m.

The site, previously owned by Cardiff Data Investments Limited (CDIL), comprises three data halls capable of housing about 12,000 servers, and is sited on 26,000 square metres of freehold land.

CDIL initially bought the facility, in Cardiff’s Celtic Gateway business park, out of receivership in January 2016 for £25m, before selling it on for £9m more on 6 October.

BT is understood to have agreed a 15-year, triple-net lease, making it solely liable for covering all the costs associated with running and operating the datacentre, while Keppel owns the “shell” of the building.

Datacentres are often cited as attractive targets for investment firms because occupants tend to sign up to long leases, generating a sizeable return on their initial outlay as the years pass.

In the wake of the UK vote to leave the EU in June, there have been concerns about the impact Brexit will have on overseas firms’ willingness to invest in the UK datacentre market.

But Keppel said growing demand for in-hosted cloud services was one of main reasons it bought the Cardiff facility.

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Citing figures from datacentre market watcher Broadgroup, which predict that demand for datacentre services in the UK will see a 13% compound annual growth rate between now and 2020, Keppel said: “Notwithstanding the near-term uncertainties post-Brexit, heightened data residency requirements, as well as stricter compliance needs, may increase the onshoring of data in both the UK and the EU.”

Chua Hsien Yang, CEO of Keppel DC REIT, said the company’s investment in Cardiff should help support the city’s digital transformation.

“The strategic addition of this facility presents an attractive opportunity to participate in Cardiff's growth as one of the emerging digital clusters that hosts an internet exchange point outside of London,” he said. “The city is undergoing a digital transformation, driven by strong government support and a growing business community.”

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