German landlord Aroundtown looks to convert offices into data centres
FILE PHOTO: The skyline of the banking district is seen during sunset in Frankfurt, Germany, April 21, 2024. REUTERS/Kai Pfaffenbach/File Photo
(Reuters) -Aroundtown, one of the largest German-listed landlords, is planning to convert office spaces into data centres as demand for them grows in Europe, the group said on Wednesday after announcing it had tripled its first-quarter profit.
Aroundtown has been facing higher vacancy rates in its office spaces, the biggest segment of its portfolio, since the COVID-19 pandemic led to a shift to remote work.
It has already been converting some of its less sought-after office rentals into serviced apartments, most of which are expected to enter operation in 2026.
Timothy Wright, Aroundtown's Head of Investor Relations, said the Luxembourg-based company was in the early stages of obtaining regulatory approvals for data centre conversions and it hoped to team up with more specialised companies.
Potential tenants could be companies active in businesses ranging from cloud computing to autonomous driving, he said.
"In five years time, let's hope we have some data centres in our portfolio," Wright said in an interview. "It's a different asset class for us ... We need to build up the IT know-how for the setup."
The main challenges for data centre conversions in Germany include municipal regulatory permit approvals and obtaining confirmation from power providers that required energy needs can be met, he said.
"It takes a few years until we can get to, let's say, crystalising the gains," Wright said.
So far Aroundtown has received one regulatory permit to convert an office space into a data centre in Frankfurt, though it has not yet received the go-ahead for its electricity usage.
Upon obtaining the required approvals, Aroundtown could either sell the properties for quick cash or undertake the conversions itself, Wright said.
Data centre tenants typically have their own specific requirements, he added, so Aroundtown would aim to ensure they are already leasing the properties before the construction to convert them begins.
"You can build a data center and go to Amazon, and they're like, 'Yeah, actually, this is not really what we need,'" he said.
(Reporting by Marleen Kaesebier in Gdansk; Editing by Joe Bavier)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
44 minutes ago
- New Straits Times
Reach Ten logs RM7.1mil net profit on RM23.1mil revenue in Q1
KUALA LUMPUR: Sarawak-based telecommunications service provider Reach Ten Holdings Bhd (Reach Ten) posted a net profit of RM7.1 million on revenue of RM23.1 million for the first quarter (Q1) ended March 31, 2025. Revenue for the quarter was mainly driven by Reach Ten's satellite-based communication networks and services segment, which contributed 63.2 per cent of total revenue. "Fibre optic communication networks and services accounted for 21.4 per cent, while telecommunications infrastructure and managed services contributed 15.4 per cent," it said in a statement. There are no comparative figures for the corresponding preceding quarter's results as this is the second interim financial report by the company in compliance with the listing requirements. Reach Ten declared a first interim single-tier dividend of 1.0 sen per share for its financial year ending December 31, 2025 (FY25). The payout, totalling RM10.0 million, will be paid on July 21 to shareholders whose names appear on the record of depositors on June 30. Managing director Leo Chin said the maiden post-listing dividend is in line with the company's dividend policy to distribute up to 30 per cent of its net profit, reflecting its commitment to enhancing shareholder value and delivering sustainable returns. "With healthy cash and bank balances, as well as fixed deposits of RM63.0 million, Reach Ten aims to maintain a balanced approach between rewarding shareholders through dividend distributions and retaining sufficient capital to support future growth and strategic initiatives," Lee said. Reach Ten remains optimistic about its business outlook, supported by positive structural trends in Malaysia's telecommunications sector. "Our strategic focus on underserved markets, particularly in Sarawak, positions us well to capture emerging opportunities and deliver long-term value to our shareholders," Chin added.
The Star
an hour ago
- The Star
US pushes security ally Australia to spend more on defence
FILE PHOTO: U.S. Defense Secretary Pete Hegseth attends a joint press conference with Philippine Defense Minister Gilberto Teodoro, at Camp Aguinaldo, in Quezon City, Metro Manila, Philippines, March 28, 2025. REUTERS/Lisa Marie David/File Photo SYDNEY (Reuters) -U.S. Defence Secretary Pete Hegseth has asked security ally Australia to increase defence spending in a meeting with Defence Minister Richard Marles on Friday in Singapore. The defence chiefs also discussed the need to significantly lift U.S. submarine production rates to meet AUKUS targets. Australia is scheduled to pay the United States $2 billion by the end of 2025 to assist its submarine shipyards, in order to buy three Virginia-class submarines starting in 2032 -- its biggest ever defence project. The defence ministers meeting on the sidelines of the Shangri-La Dialogue, Asia's premier security forum, is only the second between the security allies since the Trump Administration took office. Hegseth had "respectfully" said Australia should increase defence spending, Marles said in an Australian Broadcasting Corporation television interview after the meeting. "Clearly we have increased defence spending significantly and that is acknowledged, but we want to be making sure we are calibrating our defence spending to the strategic moment that we need to meet," he said. "We are very much up for the conversation, and the American position has been clear," he added. Marles said they did not discuss a number, although a Pentagon official had previously said Australia should spend 3% of gross domestic product. Australia's Prime Minister Anthony Albanese, who was re-elected this month and is yet to meet U.S. President Donald Trump, did not raise defence spending in this year's national budget, saying his government had already announced a A$50 billion boost over a decade. Albanese said on Thursday defence spending would rise to 2.4%. "In a rational world defence spending is a function of strategic threat - there is definitely strategic threat in the world today and we are rational people," Marles said. The AUKUS submarine partnership and working together to provide stability in the Indo-Pacific were also discussed, Marles said. "AUKUS is happening and we talked about the need to maintain the momentum," he said. "We want to be seeing a significant increase in the production and sustainment rate, the availability of Virginia class submarines for the United States fleet." U.S. production of Virginia class attack submarines has fallen behind U.S. Navy targets, and concern has been raised in Washington over selling used submarines to Australia under AUKUS if this reduces the fleet size. (Reporting by Kirsty Needham in Sydney; Editing by Michael Perry)
The Star
2 hours ago
- The Star
Work on US$1 bil Trump Tower in Vietnam could start next year, source says
HANOI: Investment in a planned Trump Tower in Vietnam is estimated at around US$1 billion and construction of the at least 60-storey skyscraper could start next year, a person familiar with the discussions told Reuters. The building, for which plans are still preliminary, would be the second major project the Trump Organisation, U.S. President Donald Trump's family business, is reviewing in Vietnam. The South-East Asian country is currently in trade talks with Washington to avoid crippling 46 per cent tariffs. Eric Trump, senior vice president of the Trump Organisation, visited Vietnam last week to survey the site for the tower in the country's southern business hub of Ho Chi Minh City and to attend the groundbreaking for a golf resort in northern Vietnam. The approval for the golf club, according to Prime Minister Pham Minh Chinh, had been expedited by the authorities. The Trump Organisation would operate the golf club, while its Vietnamese partner, real estate firm Kinhbac City, would focus on developing it with an estimated investment of US$1.5 billion, the source said. The division of work had not been previously reported. A similar arrangement is likely to be agreed for the Trump Tower, with the investment expected to come mostly from local partners, the source said, declining to be named because the information is not public. The Trump Organisation did not reply to a request for comment. Kinhbac City, a leading industrial real estate developer in Vietnam, did not respond to a request for comment. When it announced its collaboration with the Trump Organisation in October, the company said the venture "will focus on developing 5-star hotels, championship-style golf courses, and luxurious residential estates and unparalleled amenities in Vietnam." During his visit last week, Eric Trump toured the site where the skyscraper would be built and met local officials, the source said. That was in line with the schedule of his engagements with the city's authorities, according to a Vietnamese document seen by Reuters. The tower would be built in Thu Thiem, an area under development in central Ho Chi Minh City where a new financial centre is planned to be built, the document from the city's authorities showed. At the groundbreaking for the golf resort, Eric Trump said the projects to be developed in Vietnam would be "the envy of all of Asia and of the entire world", adding he would visit the country frequently to further the company's plans. Approvals for the tower project are still being sought and no final decision had been made about when construction will start, the source said, adding that the aim was to have the groundbreaking next year. The investment could be larger than US$1 billion if permits are obtained for a building with more than 60 floors, the person said. The Trump Organisation operates several towers in the United States and across the world, but does not own all of them. The flagship Trump Tower in the Manhattan neighbourhood of New York City was built in the 1980s. Others have since been built in Chicago, Florida and abroad, including in Turkey and the Philippines. - Reuters
