KDDI, the Japanese telecoms firm that’s most known in the UK as the owner of Telehouse, has acquired the 1.1 million sqft Inventory Estate in London’s Docklands.
According to Green Street News, KDDI bought the estate from LaSalle Investment Management and Trilogy Real Estate for about £250 million. The site, previously known as Republic, includes two office buildings totalling 483,000 sq ft, which are currently being let to education tenants. More importantly for KDDI, however, is the fact that the site includes planning consent for a 376,000 sqft data centre, fuelling speculation that Telehouse could soon add a sixth data centre to its London Docklands campus.
Telehouse already operates four data centres from its Docklands campus, including Telehouse North, East, West and North Two. The campus is described by the company as the home of Europe’s first carrier-neutral colocation facility and serves as the primary of the London Internet Exchange, with more than 530 carriers, ISPs and ASPs connected across the site.
Telehouse is already in the process of expanding its Docklands campus with a new £275 million data centre dubbed Telehouse West Two, which brings 121,546sqft of additional white space, KDDI could choose to allow further expansion with its latest acquisition, although it isn’t confirmed whether that’s the intention behind the purchase. It’s important to note that the building that has consent to become a data centre at Inventory Estate is around 9% larger than Telehouse West Two, and represents around 10% of London’s consented and powered data centre pipeline.
It’s also important to add that just because there is consent for a data centre of that size, it does not automatically mean KDDI will build out the scheme exactly as consented. It could choose a different approach for the site, but given the demand for data centres in the UK at the moment, especially in areas as space-starved as London, we would hazard a guess that a data centre will be coming to the site regardless. Especially given the site is already surrounded by Telehouse’s existing locations, as well as directly adjacent to Global Switch East, Global Switch North, and the as-yet-built Global Switch South.
While KDDI may have bought the site with the data centre in mind, the campus also comes with consent for other uses. Separate planning approval is in place for a 36-storey student accommodation tower comprising 716 flats, as well as a 30-storey build-to-rent tower with 150 apartments. If fully developed, the wider site could reportedly have an end value of £1.5 billion.
LaSalle and Trilogy originally acquired the campus from Criterion Capital in 2015 for £170 million. Since then, the joint venture has repositioned the site from offices leased to the local authority into an education-led campus. Only time will tell what KDDI intends to do with the site it just paid £250 million for.
