Digital Realty Trust Secures $100M Unsecured Credit Facility, Eyes Asia-Pacific

Digital Realty Trust Inc. has big plans in the Asia-Pacific region, and the data-center solutions provider has just made a move in its facilitation of those plans with the closing of a new senior unsecured revolving credit facility valued at $100 million.

August 24, 2011
By Barbra Murray, Contributing Editor

Digital Realty Trust Inc. has big plans in the Asia-Pacific region, and the data-center solutions provider has just made a move in its facilitation of those plans with the closing of a new senior unsecured revolving credit facility valued at $100 million. A four-bank consortium provided the financing.

Scheduled to mature in August 2012, the new credit facility, which complements Digital Realty’s existing $750 million credit facility, offers the REIT the potential to access even more funds, as it can be doubled to as much as $200 million. “We greatly appreciate the confidence and support of our lenders as we expand our business in the Asia Pacific region to meet the extraordinary demand from local and multinational customers for institutional-quality data center solutions,” A. William Stein, Digital Realty CFO and Chief Investment Officer, said. “This credit facility helps us match non-US dollar denominated assets with liabilities to provide a natural hedge against currency fluctuations.”

Digital realty has its eye on acquisition, development and redevelopment options in Asia-Pacific, which the company entered for the first time in late 2010 with the acquisition of a nearly completed 370,500 square-foot data center facility in Singapore. Adobe Systems Inc. recently signed a lease for 80,000 square feet at the property.

In July, the REIT made its second move in the region with the closing of the $11 million purchase of an 8.6-acre site in Sydney, Australia, that can accommodate the construction of 200,000 square feet of data center space. “The Sydney market is a robust business environment with a limited supply of data center space available to meet the customer demand,” Michael Foust, Digital Realty CEO, said during the company’s second quarter earnings call in last month. “Traditionally, colocation managed services and regional telecom providers have been the source of data center space in Australia, aside from the do-it-yourself option. We believe that our suite of flexible data center solutions will be a significant benefit to customers who are expanding their IT operations in the region.”

The new credit facility allows for funds to be drawn in Singapore and Australian dollars initially, and in Hong Kong dollars down the road.

“The Singapore project is going extremely well, and we’re confident on Sydney and Melbourne, and we’re working hard to try to acquire our first opportunity in Hong Kong,” Foust added. “So you’ll definitely see us allocate more capital internationally on a dollar amount.”

In addition to supporting acquisition and development endeavors, Digital Realty’s new credit facility will provide working capital and will also be utilized for the debt repayment and general corporate purposes.