NextDC has accepted an offer to sell its Wharf Street, Brisbane facility for $11.27 million after converting it into a 3000 square metre, six-storey data centre.
The ASX-listed company has engaged in a “sale and leaseback” scheme for each of the properties it has purchased to build its national network of data centres.
This strategy, also favoured by the likes of Woolworths and Bunnings, sees NextDC purchase a building, invest in its refurbishment, then sell it back to real estate investors coupled with a long-term lease for exclusive use.
NextDC purchased the Wharf Street (Brisbane) data centre site for some $6.5 million, gutted it and replaced all existing lifts, fire suppression, power and air conditioning services, and will now sell it to property investors for $11.27 million. NextDC will simultaneously sign a lease agreement to run co-location services from the facility for the next 20 years, with four additional options of five year blocks.
“We never see ourselves as a property investor,” NextDC chief financial officer Robin Khuda told iTnews. “We bought those properties in order to control our own build and fit-out program.
“As a rule of thumb, property investment provides you approximately eight to ten percent yield, whereas investing into fit-out and operating a co-location model, we get higher yield. This way we ensure our shareholders are getting greater return on their investment.”
Khuda said the “triple-net” lease agreement still allows for NextDC to have effective control of the property.