Storage and information management services group Iron Mountain has announced the sale and leaseback of a portfolio of five London facilities to Intermediate Capital Group (ICG) for $178 mln (€149 mln).
Iron Mountain will remain in the facilities totalling 550,000 sq ft (51,000 m2), under an initial twelve-year lease term, with options to renew up to an additional 20 years.
The transaction is part of Iron Mountain’s ongoing capital recycling programme, and Iron Mountain expects to utilize the proceeds to reinvest in higher growth areas of its business.
’With our strong development pipeline together with highly attractive market valuations for industrial assets, we are pleased to continue our capital recycling program,’ said Barry Hytinen, executive vice president and CFO at Iron Mountain. ‘The sale-leaseback of these assets allows us to generate significant investable proceeds while essentially maintaining long-term control of the facilities. On a leverage neutral basis, we estimate this transaction will generate nearly $140 mln of capital, which we intend to invest in higher growth areas, including our data center business.’
Chad Brown, director at ICG said, ‘The Iron Mountain portfolio is a prime example of the mission critical real estate that ICG’s Sale and Leaseback fund is seeking to invest in. This represents the fund's third transaction in 2021 and second transaction in the UK, following the 2.94m sq ft forward funding of Jaguar Land Rovers new facility at Mercia Park, earlier this year.’
ICG was advised by their asset management partner Marchmont Investment Management and CBRE. Iron Mountain was advised by JLL.