May 19, 2023 | Posted by Abdul-Rahman Oladimeji
CapitaLand Ascendas REIT (CLAR) is seeking to acquire Seagate Singapore's research and development facility, which includes a data center, for $163.14 million. The facility, known as 'The Shugart' and located in the one-north district of Singapore, was constructed only eight years ago and was named after Alan Shugart, the founder and former chief executive officer of Seagate. The acquisition is expected to close in the second quarter of 2023.
The building consists of a nine-story tower and a six-story tower with three subterranean levels, totaling 440,029 square feet. The majority of this floor space is devoted to research and development, but it also contains a data center, a clean room, a sky garden, a sports hall, and a gym. The capacity and dimensions of the on-premises data center have not been disclosed. The proposal estimates that the total acquisition cost, including stamp duty and an acquisition commission, will amount to $173,744,000. As of March 2023, the building was valued at $172m.
Seagate Singapore is the sole tenant of the facility and will continue to be so for the next ten years, per the terms of a lease-back agreement with an annual rent increase of 2.5%. Seagate will have the option to extend its contract by ten years.
Seagate is a provider of data storage hardware. The business was founded in 1978 as Shugart Technologies, and in 1980 it produced the first 5.25-inch hard disk drive. The United States Department of Commerce fined the company $300 million a few months ago for selling storage to Huawei, an entity to which products cannot be sold without a license. The funding will be repaid in five years worth of $15 million in installments.
