US data centers-backed REIT seeks $90 mn Korean IPO in 2021

A South Korean real estate investment trust (REIT), backed by data centers in North America, is preparing an initial public offering worth 100 billion won ($90 million) this year, in what is set to become the country’s first data centers-backed REIT.

Its underlying asset is an equity stake in a $1.2 billion portfolio of data centers in the US and Canada, held by CBRE Caledon Capital Management, a Canadian investment fund of CBRE Global Investors, according to investment banking sources on Jan. 28.  

Last year, CBRE Caledon joined a group of investors, led by Colony Capital, to acquire a minority stake in the portfolio, comprised of 12 North American data centers managed by Vantage Data Centers. They are located across Santa Clara and Quincy in the US, as well as Quebec and Montreal in Canada.

Both IGIS and Hana have recently submitted an application for the REIT's business license with the land and transportation ministry.

The prospective IPO is expected to diversify South Korea’s listed REIT market. Last month, ESR Kendall Square REIT Co. became the country's only listed logistics REIT. The Canada Pension Plan Investment Board (CPPIB) holds a 24.85% stake in ESR Kendall Square REIT, which has been trading above its IPO price of 5,000 won since the listing. 

Since last year, the underlying assets of Korean REITs have been diversified into apartments (IGIS Residence REIT), gas stations (Koramco Energy Plus REIT) and logistics centers (ESR Kendall Square REIT).

Data center facilities are expected to generate steady rental incomes, supported by growing demand from cloud service providers and 5G mobile service companies. 

Write to Jin-Seong Kim at jskim1028@hankyung.com
Yeonhee Kim edited this article.

(Amended on Feb. 8 to remove the tenants' names.)