Allied Property to Sell Urban Data Center Portfolio for C$1.35 Billion to KDDI

By Adriano Marchese

Allied Properties Real Estate Investment Trust said Wednesday that it will sell its network-dense, carrier-neutral, urban-data-center portfolio in Toronto for 1.35 billion Canadian dollars ($1.02 billion).

The Canadian REIT said that it has agreed to sell the portfolio to KDDI, a Japanese telecommunications operator, for C$118 million above net asset value.

Allied said that over the past five years, it has turned a profit on the portfolio, bringing it to a point of generating earnings and optimizing value.

"Allied explored a variety of monetization alternatives for the Portfolio... and determined that the best course of action financially and operationally was to sell the Portfolio in its entirety," the company said.

The company expects to use the majority of the proceeds, about C$1 billion, to retire debt while the rest will be used to fund its upgrade and development activity over the course of this year and next.

President and Chief Executive Officer Cecilia Williams said that the company's debt-metrics will be back within targeted ranges and will continue to improve as its upgrade and development initiatives drive earnings growth.

She also said that the transaction will also be accretive to funds from operations and adjusted FFO per unit.

Since the sale will bring in a significant increase in taxable income for this fiscal year, Allied will need to declare and pay a special distribution to all unitholders of record as at Dec. 31, 2023.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

June 21, 2023 06:32 ET (10:32 GMT)

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