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NEXTDC disputes APDC's A$300M portfolio valuation


According to Market Intelligence, December 2022


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NEXTDC disputes APDC's A$300M portfolio valuation

NEXTDC Ltd. has disputed Asia Pacific Data Centre's recent valuation of its three data centers at A$300 million.

APDC, in which NEXTDC holds a 29.2% stake and had been in the running to acquire it, recently appointed agents to commence a marketing campaign for its portfolio.

APDC's independent valuation of the portfolio took into account recent portfolio sales, the triple-net lease structure and the ongoing sale of the Metronode data center business to Equinix Inc. under a nearly A$1.04 billion deal, representing a 4.73% yield.

NEXTDC CEO Craig Scroggie said in a statement: "APDC's reference to Metronode's assumed 4.73% acquisition yield is akin to one suggesting that a property landlord should trade on the same capitalization rate or multiple as its tenant be they BHP or Google. This has no logic and is simply incorrect."

NEXTDC noted that APDC's properties were independently valued at A$212.8 million a few months ago and also stressed that APDC, being a real estate investment trust, owns the base buildings and land and collects a passive rental stream and has no economic exposure to the operations of its single data center operator tenant, NEXTDC.

NEXTDC had earlier called for an extraordinary general meeting of security holders in early 2018 to wind up APDC after failing to acquire it. The company had also voiced concerns about the governance track record of APDC's new manager, 360 Capital Group.