Schroder European adds Dutch data centre for EUR 20m

The firm said the acquisition reflected an “attractive” net initial income yield of 10%.

It had now fully deployed all of its capital currently available for investment in a 10-asset portfolio, located in growth cities and regions that were benefiting from the favourable eurozone economic outlook.

The 23,700 square metre mixed-use building had a current primary usage as a data centre, with additional office and storage space.

SERE said the building was extensively refurbished in 2006 and 2015, and included 495 parking spaces.

It was currently let to a strong covenant, KPN NV, which it described as a “leading” Dutch telecom and IT service provider, with an initial term expiring 31 December 2026 and subject to annual indexation.

Apeldoorn was described as being “”strategically located” in the centre of the Netherlands, at the intersection of the north-south and east-west motorway axis.

Situated 75 km from Amsterdam, it was expected to be a beneficiary of the growing trend of back-office relocation by information and communications technology businesses, 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 was forecast to grow at 1.6% over the next four years, ahead of domestic GDP growth.

Its population growth had seen a steady upward trend since the 1960s, outperforming a number of other similarly-sized cities over the same period.

Apeldoorn represented the tenth acquisition by SERE, which had now invested around €235m at a blended net initial yield of approximately 6.5%, in established Western Europe growth cities.

“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,” said Schroder Real Estate Investment Management fund manager Jeff O'Dwyer.

“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.”