OVERLAND PARK, Kan.,
April 30, 2019 /PRNewswire/ -- QTS
Realty Trust (NYSE: QTS), a leading provider of software-defined
and mega scale data center solutions announced today, as part
of its global growth strategy, the expansion of its operations
internationally with the acquisition of two operating data centers
in the Netherlands. QTS acquired
the two data center assets, totaling approximately 30 gross
megawatts currently built out, from TCN SIG Telehousing B.V. for
approximately $44 million, including
closing costs. QTS currently anticipates approximately $15 million of additional capital investments
required for recommissioning of the two facilities. This additional
investment, in addition to the initial purchase price, represents
an upfront cost per megawatt of approximately $2 million, which is materially below the average
cost to build in the Netherlands
market.
"The data center industry has increasingly become a global
business, particularly among our target hyperscale customers. The
European market, in particular, has experienced a significant rise
in demand, with 2018 representing a record year of absorption
across the four largest European markets," said Chad Williams, Chairman and CEO – QTS. "This
acquisition advances our global expansion strategy and provides a
platform for future growth internationally at a significantly
de-risked entry point. Acquiring strategically located facilities
at a competitive price aligns with our overall growth strategy and
has clear long-term benefits for our customers and
shareholders."
The two data center assets are located in the cities of
Groningen and Eemshaven, which are located northeast of
Amsterdam. The Netherlands remains
one of the top European markets for data center users due to
competitive utility and operating costs, availability of renewable
power resources and proximity to diverse connectivity options to
other major European markets.
The Groningen facility currently has built-out capacity
representing approximately 10 gross megawatts of power and 45,000
square feet of raised floor data center space. The Groningen data
center is largely stabilized with approximately 20 colocation
tenants and a weighted average remaining tenant lease term of
approximately 3.5 years. The facility represents one of the most
interconnected data centers in the
Netherlands market with more than 10 network providers and
internet exchanges on site including NL-IX and Eurofiber.
The Eemshaven facility, which is currently vacant, was
originally constructed to support a single hyperscale tenant and
has built-out capacity representing approximately 20 gross
megawatts of power and 113,000 square feet of raised floor data
center space. The facility is strategically located adjacent to
multiple hyperscale customer-owned data center deployments,
including a 500+ megawatt data center campus operated by one of the
largest hyperscale cloud providers in the world. In addition, the
facility is located in close proximity to multiple transatlantic
fiber cable landings providing access to multiple markets within
Europe and North America. QTS anticipates investing
incremental capital over the next several quarters to recommission
the facility and expects to position the Eemshaven data center with
sellable capacity in late 2019. QTS expects the Eemshaven facility
to support its ongoing hyperscale growth initiatives and has
already engaged in preliminary discussions with multiple potential
anchor tenants.
"We are pleased to welcome QTS to the northern Netherlands region," said Robert van Tuinen, Manager Strategy &
Business Development – Groningen Seaports NV. "Groningen Seaports
NV operates the Eemshaven seaport which has experienced a
significant increase in interest and deployments from global
hyperscale data center providers looking to take advantage of dense
undersea fiber connectivity options to surrounding European
markets. QTS has established an impressive operating track record
in the US and we look forward to supporting their continued
expansion as part of the ongoing growth of the Eemshaven and
Groningen data center markets."
In conjunction with the acquisition of the two data centers, QTS
has entered into a partnership with Zentrys Group B.V. ("Zentrys"),
a Netherlands-based data center
operations company that has maintained day-to-day operations of the
Groningen and Eemshaven facilities for the past five years. Zentrys
will continue to provide on-site data center operations,
maintenance and customer support for both of the acquired
facilities.
In addition, QTS has entered into a separate partnership with
Eurofiber, a leading international provider of fiber
infrastructure, who will provide local sales and marketing support
in addition to robust fiber connectivity. Through its partnership
agreement, QTS will be able to offer its customers access to
Eurofiber's innovative DCspine platform for on-demand cloud and
data center networking, providing connectivity between QTS'
Netherlands data centers,
surrounding European markets and subsea cable landings in
Eemshaven.
QTS expects these partnerships will accelerate the Company's
European market penetration while reducing execution risk in a new
market and maintaining continued high-level customer
support.
Financial Impact
As a result of the low basis
acquisition price relative to in-place power capacity at the
Eemshaven facility, combined with contracted, in-place revenue at
the Groningen site, QTS expects this transaction to be breakeven to
its 2019 OFFO per share. The Company anticipates a significant
potential OFFO per share accretion opportunity upon incremental
leasing in the future, particularly at the Eemshaven facility which
has substantial power capacity fully built out and available. QTS
purchased the two data centers utilizing a combination of cash on
hand and availability under its existing revolving credit facility.
The acquired facilities are expected to contribute approximately
$3 million in annualized recurring
revenue and approximately $1 million
in annualized adjusted EBITDA at closing. The transaction closed on
April 23 and is reflected in QTS'
2019 financial guidance which was updated to reflect the
acquisition in conjunction with QTS' first quarter 2019 earnings
release.
About QTS
QTS Realty Trust, Inc. (NYSE: QTS) is a
leading provider of data center solutions across a diverse
footprint spanning more than 6 million square feet of owned mega
scale data center space within North
America and Europe. Through
its software-defined technology platform, QTS is able to deliver
secure, compliant infrastructure solutions, robust connectivity and
premium customer service to leading hyperscale technology
companies, enterprises, and government entities. Visit QTS at
www.qtsdatacenters.com, call toll-free 877.QTS.DATA or follow on
Twitter @DataCenters_QTS.
Investor Relations Contact
Stephen Douglas, EVP Finance
ir@qtsdatacenters.com
Media Contact:
Carter B.
Cromley
(703) 861-7245
carter.cromley@qtsdatacenters.com
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SOURCE QTS Realty Trust, Inc.