Helaba focuses on sustainability in Nordic data centre debt deal

The German bank says energy efficiency was a key reason to finance Brunswick and Pictet’s Swedish data centre acquisition.

In December, German bank Helaba provided a senior loan to finance the purchase of a mixed-use development in Stockholm, comprising a data centre, warehouse, offices and printing facilities.

The loan was provided to a joint venture between Swedish property investor Brunswick Real Estate and Swiss investment manager Pictet Alternative Advisors, which acquired the asset from Swedish property owner Bonnier Fastigheter. The deal was the first to be closed since the two organisations established a partnership focused on investing in and developing sustainable data centres across the Nordics.

Vanda 3 is a 678,126 square foot property located in the northern suburbs of Stockholm. It hosts tenants operating in power-intense sectors, recovering and distributing excess heat produced by the asset’s data centre, feeding it into the Swedish capital’s district heating system. For properties that have a higher-than-average power supply demand, as is the case of data centres, the ability to reduce carbon emissions is essential, according to Birgitta Leijon, head of real estate finance for the Nordics at Helaba.

Leijon: ‘For the data centre segment, energy-conserving systems reducing the carbon footprint are of particular importance’

“For the data centre segment, energy efficiency and energy-conserving systems reducing the carbon footprint are of particular importance,” Leijon told Real Estate Capital.

The property’s location played a vital role in securing the financing, she added. The Nordic countries are regarded as ideal locations for data centres because of the region’s cool climate, supply of low carbon energy and strong digital connectivity. More than 200 data centres have been built in the region over the past decade. “The Nordics is well suited for this asset class as it offers a reliable power supply, data transmission and IT workforce,” said Leijon.

For data centres, continuity of power supply is paramount. The loss of power to a data centre could mean multiple businesses lose access to their data. According to Patrik Andersson, chief executive and partner at Brunswick Real Estate, power supply in the Nordics is not just reliable, it is more sustainable than almost anywhere else.

Andersson: ‘We hope to see a broader support for the asset class and for sustainability in real estate finance’

“From a sustainability point of view, it is better to set up a data centre in the Nordics than almost any other region in the world, given the Nordics’ supply of power is greener and more renewable, therefore more sustainable,” Andersson told Real Estate Capital. “What makes data centres sustainable are their source of power generation. If that’s wind, that’s more sustainable than if it’s coal, for instance.”

Although property investors are increasingly looking to deploy capital in data centres – which have become more relevant due to the pandemic as demand for data storage has increased due to the widespread adoption of remote working – sourcing finance for them is not easy, said Andersson.

“Generally, it is reasonably difficult to source financing as data centres are not yet an established asset class within the banking system,” he said. “We hope to see a broader support for the asset class and for sustainability in real estate finance.”