Centuria Industrial REIT has snapped up the Telstra data centre complex in Clayton, Victoria in a $417 million deal.

Incorporating 10 buildings and spanning 3.2 hectares, the site includes Telstra's newest 6.1MW data centre, as well as its adjacent 6.6MW data centre and associated energy centre.

The sale features a triple-net lease-back arrangement which means Telstra will retain ownership of all IT and telecommunications equipment, along with ongoing operations and responsibility for building upgrades and repairs, future capex requirements and security.

At a glance:

• The Telstra data centre complex in Clayton, Victoria has been acquired by Centuria Industrial REIT in a $417 million deal.
• The sale features a triple-net lease-back arrangement which means Telstra will retain ownership of all IT and telecommunications equipment, along with ongoing operations and responsibility for building upgrades and repairs, future capex requirements and security.
• The site is situated 25 km from Melbourne's CBD and spans 3.2 hectares.

The lease is for an initial period of 30 years with two 10-year options for Telstra to extend.

Telstra CEO Andrew Penn said the sale was another marker of progress on the company’s T22 strategy.

“As part of T22, we have the ambition to monetise up to $2 billion worth of assets to strengthen our balance sheet. This deal means we have now reached over $1.5 billion,” he said.

“Data centres are an incredibly important part of the digital ecosystem and we continue to own and operate world-leading facilities in Australia and overseas."

The sale has no impact for Telstra customers

Due to the long tenure of the lease-back, the transaction will not be treated as a sale under accounting standards, therefore no accounting gain will arise.

Centuria REIT's fund manager Jesse Curtis said Telstra will become the fund's largest tenant, representing 13 per cent of the portfolio’s income.

"The data centre allows CIP to expand into the industrial sub-sector of data centres, a coninually growing sector, particularly in light of the increased demand that has resulted from COVID-19 impact and reliance on digital infrastructure."

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