Digital Core Reit · SGX:DCRU
Digital Core Reit — Merger or Acquisition (September 2022)
33 slides from Digital Core Reit's merger presentation, Sep 22, 2022
Slide 1: Proposed Acquisition of Core Data Centres in Frankfurt and Dallas
Proposed Acquisition of Core Data Centres in Frankfurt and Dallas 22 SEPTEMBER 2022 Core | Sustainable | Growth
Slide 2: Important Notice
IMPORTANT NOTICE This presentation should be read in conjunction with the announcement released by Digital Core REIT on 22 September 2022 titled "PROPOSED AC QUISITI ON OF (I) A 25.0% INTEREST IN A D ATA C ENTRE LOC ATED IN GERMANY OR (II) (IN THE EVENT THE EQUITY FUND RAISING TAKES PLACE) AN 89.9%
Slide 3: Table of Contents
TABLE OF CONTENTS 1 Transaction Overview 2 Strategic Rationale 3 Debt Funded Scenario 4 Property Overviews 5 Independent Market Research SEPTEMBER 2022 | 3
Slide 4: Transaction Overview
TRANSACTION OVERVIEW SEPTEMBER 2022 | 4
Slide 5: Delivering Growth and Long-Term Value
DELIVERING GROWTH AND LONG-TERM VALUE Proposed Acquisition of Data Centres in Frankfurt and Dallas Enhances Digital Core REIT’s Portfolio and Returns New Enhanced Improved Core Markets Portfolio Quality Customer Profile CORE Frankfurt #2 Dallas #5 3 Years 73% Market in Market in Average Age of EMEA
Slide 6: Transaction Overview
TRANSACTION OVERVIEW Flexibility in Acquisition and Funding Structure to Optimise Value Creation for Unitholders Regardless of Market Conditions with Continued Commitment by the Sponsor Debt Funded Scenario Equity Fund Raising Scenario • 89.9% interest in the Frankfurt Facility; and • 25.0% interest
Slide 7: New Data Centres Highlights
NEW DATA CENTRES HIGHLIGHTS Purpose-Built, High-Quality Data Centres Located in Core Markets in Frankfurt and Dallas with a Combined Average Age of 3 Years Frankfurt Facility: DIGITAL FRANKFURT Dallas Data Centre: 1215 INTEGRITY DRIVE New Core Data Centres: CUSTOMERS % of Total Top 5 Customers Annua
Slide 8: Pro Forma Digital Core REIT Portfolio
PRO FORMA DIGITAL CORE REIT PORTFOLIO Equity Fund Raising Scenario CURRENT PRO FORMA PORTFOLIO VALUE (US$)(1) US$1.4 Bn US$2.0 Bn GEOGRAPHY Metros(2) Metros(2) Northern Virginia 39% 33% Frankfurt 33% Silicon Valley 35% Northern Virginia 23% North America Toronto 19% Silicon Valley 21% 100% 67% Europ
Slide 9: Strategic Rationale
STRATEGIC RATIONALE SEPTEMBER 2022 | 9
Slide 10: Summary of Strategic Rationale
SUMMARY OF STRATEGIC RATIONALE 4 Seeding Growth 3 Scale and Diversification 2 Portfolio Quality 1 Core Global Markets SEPTEMBER 2022 | 10
Slide 11: Entry into Attractive Core Data Centre Markets
ENTRY INTO ATTRACTIVE CORE DATA CENTRE MARKETS Equity Fund Raising Scenario INTERNATIONAL EXPANSION INTO EUROPE PRESENCE IN TOP 5 NORTH AMERICA MARKET FRANKFURT DALLAS / FORT WORTH ▪ One of the fastest growing data centre ▪ Logical waypoint between the East and West markets in Europe Coasts with fav
Slide 12: Further Expansion into Developed Markets
FURTHER EXPANSION INTO DEVELOPED MARKETS Equity Fund Raising Scenario CURRENT PRESENCE(1) PRO FORMA PRESENCE(1) COUNTRY 81% 56% EXPANSION 19% 11% 33% ▪ Leading global economies ▪ Stable policy environment and supportive legislation METRO 4% 7% 8% Northern Virginia EXPANSION Northern Virginia Silicon
Slide 13: Data Centres Powered by Renewable Energy
DATA CENTRES POWERED BY RENEWABLE ENERGY Equity Fund Raising Scenario FRANKFURT DALLAS Hydroelectric Power Wind Power DIGITAL 1215 FRANKFURT INTEGRITY DRIVE 21,217 TONS 11,446 TONS CO2 Reduction Per Year(1) CO2 Reduction Per Year(3) 3,110 1,442 Equivalent Equivalent Homes Homes Powered Annually(2) 1
Slide 14: Integrated Data Centres Leveraging PlatformDIGITAL
INTEGRATED DATA CENTRES LEVERAGING PLATFORMDIGITAL® Equity Fund Raising Scenario 850 950 East Collins East Collins Quality 900 904 908 1232 Quality Way Quality Alma Way Rd. 1210 907 Integrity Security 1215 Row Integrity Hanauer Landstraße Campus FRANKFURT DALLAS 2323 Bryan St. Gateway Data Centre €1
Slide 15: Scaling and Diversifying
SCALING AND DIVERSIFYING Equity Fund Raising Scenario INCREASING SCALE DIVERSIFYING PORTFOLIO CONCENTRATION $2.0 Bn 97.2% Portfolio Top 5 86.3% $1.4 Bn Value(1) Customers(2) 50% 1,090bps 1H22 1H22 1H22 1H22 As Reported Pro Forma As Reported Pro Forma 1.8mm 57.4% Net Rentable 1.2mm Top 5 Square Feet
Slide 16: Driving Growth Through Accretive Acquisitions
DRIVING GROWTH THROUGH ACCRETIVE ACQUISITIONS Equity Fund Raising Scenario Investing Accretively with Organic Growth Opportunities from Increased Occupancy, Contracted Rental Escalations and Rental Reversions DPU ACCRETION(1) OPPORTUNITIES FOR GROWTH Distribution Per Unit (“DPU”) (US Cents) • Drive
Slide 17: Further Runway for Growth
FURTHER RUNWAY FOR GROWTH Equity Fund Raising Scenario Flexible Capital Structure Positioned to Fuel Growth and Expansion Runway AGGREGATE LEVERAGE(1) FIXED RATE DEBT 1H22 1H22 (Pre-Acquisition) (Post-Acquisition) Current Sponsor 37.5% Portfolio(3) 25.7% North EMEA America 10% 50% 62% 7% Number of 4
Slide 18: Summary of Rationale
1 High-quality portfolio across leading data centre markets in Europe and North America 2 Material improvement in geographic and customer diversification, reducing concentration risk and enhancing exposure to key growth sectors and investment grade customers +3.1%DPU ACCRETION 3 Purpose built data c
Slide 19: Debt Funded Scenario
DEBT FUNDED SCENARIO SEPTEMBER 2022 | 19
Slide 20: Benefits from Frankfurt Facility Acquisition
BENEFITS FROM FRANKFURT FACILITY ACQUISITION Debt Funded Scenario The Frankfurt Facility Enhances Income Diversification Across an Attractive Market and Customer Base with Strong Growth Prospects IMPROVED CUSTOMER BASE ATTRACTIVE DATA CENTRE MARKET INCOME STABLITY WITH GROWTH PROSPECTS Majority of F
Slide 21: Financial Highlights of Frankfurt Facility Acquisition
FINANCIAL HIGHLIGHTS OF FRANKFURT FACILITY ACQUISITION Debt Funded Scenario The Frankfurt Facility Delivers DPU Accretion While Preserving a Flexible Capital Structure to Fuel Growth DPU ACCRETIVE STABLE & MANAGEABLE LEVERAGE ATTRACTIVE DEBT PROFILE Distribution Per Unit (“DPU”) (1) Aggregate Levera
Slide 22: Pro Forma Highlights from Frankfurt Facility Acquisition
PRO FORMA HIGHLIGHTS FROM FRANKFURT FACILITY ACQUISITION Debt Funded Scenario CURRENT PRO FORMA PORTFOLIO VALUE (US$)(1) US$1.4 Bn US$1.5 Bn GEOGRAPHY Metros(2) 13% Metros(2) Northern Virginia 39% Northern Virginia 33% Silicon Valley 35% Northern California 31% North America Toronto 19% Toronto 16%
Slide 23: Property Overviews
PROPERTY OVERVIEWS SEPTEMBER 2022 | 23
Slide 24: Frankfurt Facility
Frankfurt Facility DIGITAL FRANKFURT (SOSSENHEIM) SUMMARY OF SELECTED INFORMATION Wilhelm-Fay-Straße 15 and Address Wilhelm-Fay-Straße 24, Frankfurt, Germany Land Lease Title Freehold 2017 (Phase I) / Completion Year 2022 (Phase IV) Property Type Fully-Fitted Occupancy (as of 30 June 2022) 91% Net R
Slide 25: Dallas Data Centre
Dallas Data Centre 1215 INTEGRITY DRIVE RICHARDSON, TX 75081 (USA) SUMMARY OF SELECTED INFORMATION 1215 Integrity Drive, Address Richardson, Texas, U.S. Land Lease Title Freehold Completion Year 2017 Property Type Fully-Fitted Occupancy (as of 30 June 2022) 100% Net Rentable Square Feet 117,876 Cust
Slide 26: Independent Market Research
INDEPENDENT MARKET RESEARCH Provided By: SEPTEMBER 2022 | 26
Slide 27: Frankfurt: Overview
FRANKFURT: OVERVIEW • Frankfurt is one of the fastest growing data center markets in Europe, leading the industry along with London. Although the London data center market is more mature, Frankfurt’s characteristics are more accommodating for rapid expansion. Because of this, Frankfurt actually lead
Slide 28: Frankfurt: Overview (Continued)
FRANKFURT: OVERVIEW (Continued) POWER OVERVIEW HAZARD RISK OVERVIEW • Power rates in Germany are among the highest in the EU, partly due to the German • Frankfurt is a safe data center market, from a natural disaster risk perspective Renewable Energy Sources Act introduced in 2000 • The city’s centr
Slide 29: Frankfurt: 2Q22 Market Update
FRANKFURT: 2Q22 MARKET UPDATE 2Q22 MARKET ACTIVITY ABSORPTION AND SUPPLY • The EU Council has a greed on a final draft of their Renewable Absorption (MW) New Supply (MW) (1) Energies Directive a nd an Energy Efficiency Directive • If pa ssed by the EU Parliament into law, operators a nd providers 15
Slide 30: Dallas/Fort Worth: Overview
DALLAS/FORT WORTH: OVERVIEW • The Dallas/Fort Worth (DFW) data center market has grown steadily over the past fifteen years. Demand in the DFW market often originates from companies with a large presence in the area. However, many companies outside the area evaluating the DFW market find it appealin
Slide 31: Dallas/Fort Worth: Overview (Continued)
DALLAS/FORT WORTH: OVERVIEW (Continued) POWER OVERVIEW TAX INCENTIVES OVERVIEW • Texas is unique in that it is decoupled from the interconnected power grids serving the eastern • Texas legislators passed a bill in 2013 to eliminate taxes paid on qualifying hardware and software and western United St
Slide 32: Dallas/Fort Worth: 2Q22 Market Update
DALLAS/FORT WORTH: 2Q22 MARKET UPDATE 2Q22 MARKET ACTIVITY ABSORPTION AND SUPPLY • Dallas has witnessed consistent demand in recent years, with Absorption (MW) New Supply (MW) (1) each of the last eight quarters having a lower vacancy than the previous 120MW • As providers seek opportunities to capi
Slide 33: Core Sustainable Growth
Core Sustainable Growth
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