Digital Core REIT is selling interests in three North American data centers to sponsor Digital Realty as it redirects capital toward Singapore and Japan. The Singapore-listed data center REIT expects the sales to generate about $316 million in gross proceeds, giving it capital for new Asian investments and balance-sheet priorities. The company will sell its 90 percent interest in 371 Gough in Toronto for CA$180 million, its 90 percent interest in 200 N. Nash in Los Angeles for US$79 million, and its 39 percent interest in 8217 Linton Hall in Northern Virginia for US$110 million. The move significantly reshapes the REIT’s portfolio as it swaps mature North American exposure for larger positions across Asia-Pacific.

Digital Core REIT will use part of the proceeds to acquire a 2.5 percent interest in Digital Realty’s 11 Loyang Close facility in Singapore for S$87 million, or about US$68 million. The purchase gives the REIT its first foothold in Singapore since Digital Realty created the vehicle in 2021. The company will also spend ¥17.6 billion, or approximately US$108 million, to acquire an additional 25 percent of Digital Osaka 3 from Digital Realty. The deal will lift Digital Core REIT’s ownership of the Osaka facility to 45 percent.

Singapore Becomes the REIT’s New Market

The Singapore purchase gives Digital Core REIT exposure to the 50MW facility at 11 Loyang Close, which Digital Realty operates as SIN12. The five-story data center spans approximately 365,000 square feet, and Digital Realty opened it in 2021 after announcing the project in 2019. Digital Core REIT said the facility has 94 percent occupancy, giving the company an entry into Singapore’s established data center market through a relatively small ownership position. The move also gives Digital Core REIT an Asian asset base in the same country where it lists its investment vehicle.

Japan receives a much larger allocation under the transaction, with Digital Core REIT increasing its interest in Digital Osaka 3 by 25 percentage points. The additional stake takes its total ownership to 45 percent and represents approximately US$108 million of the planned investment. The transaction gives Japan a substantially larger role in the REIT’s portfolio than Singapore, where the company will initially own only 2.5 percent of SIN12. Digital Core REIT is therefore using the deal to enter one Asian market and deepen an existing position in another.

The contrast between the two acquisitions is central to the portfolio shift. Singapore provides a new geographic foothold through a minority interest in a large, highly occupied facility, while Osaka gives the REIT significantly more exposure to an asset where it already holds an interest. The structure also avoids concentrating the entire $176 million acquisition commitment in a single market. Meanwhile, Digital Core REIT can reduce its reliance on proceeds from North American assets as it builds its Asia-Pacific presence.

Digital Realty Backs The Portfolio Shift

“With this transaction, we expect to tactically enhance Digital Core REIT’s portfolio mix, leverage and distribution per unit, in an effort to better position the REIT for the unprecedented opportunity we see ahead,” said Digital Realty chief investment officer, Gregory S. Wright. “Digital Core REIT was formed to capitalize on the enormous growth potential within the data center sector, which is now materializing in the midst of the sector’s ongoing investment cycle.

Wright’s comments position the transaction as a portfolio adjustment rather than a straightforward asset sale. Digital Realty remains directly involved on both sides of the deal, selling the North American interests to itself while transferring interests in Singapore and Osaka to the REIT. That structure allows the sponsor to manage its exposure across different ownership vehicles while giving Digital Core REIT access to assets selected for its next phase of growth. The transaction consequently keeps the sponsor relationship at the center of the REIT’s expansion strategy.

John J. Stewart, CEO of Digital Core REIT Management Pte. Ltd., the manager of Digital Core REIT, added: “This transaction marks our entry into Singapore and strengthens our presence in Japan – a pivotal step in our strategy to expand in the Asia Pacific region. This multi-faceted transaction reflects our Sponsor’s firm commitment to Digital Core REIT’s near- and long-term success and our own commitment to creating durable value for unitholders.”

North American Assets Move Back To Digital Realty

The largest disposal by value is 371 Gough Road in Toronto, where Digital Core REIT owns 90 percent of a 120,040-square-foot facility with 6.75MW of capacity. The 7.6-acre property was originally built in 1980 and converted into a data center in 2015, and Digital Realty operates it as YYZ10. Digital Core REIT will sell its interest for CA$180 million. The transaction removes one of the REIT’s Canadian assets while returning the property to its sponsor.

The second disposal involves 200 North Nash Street in El Segundo, California, where Digital Core REIT will sell its 90 percent interest for US$79 million. The 113,606-square-foot facility spans four acres, dates to 1976, and Digital Realty operates it as LAX11. The property previously carried a planned Cyxtera lease through 2033, but Cyxtera’s bankruptcy and subsequent sale to Brookfield ended that arrangement early. The sale gives Digital Core REIT another chance to monetize an older North American asset and redirect capital toward its Asian portfolio.

The third asset is 8217 Linton Hall Road in Bristow, Virginia, where Digital Core REIT will sell a 39 percent interest for US$110 million. The single-story facility was built in 2001 and contains 207,000 square feet with 9MW of capacity. Digital Core REIT recently secured a 10-year agreement covering the entire property with an unnamed “investment grade global cloud service provider,” following an earlier occupancy arrangement with a “Fortune 50 software company.” Digital Realty acquired the facility in 2017 through its acquisition of DuPont Fabros Technology, while previous reports had linked the property to Microsoft.