DealMakerz – 6th July 2018
The billionaire Reuben brothers have again demonstrated their investment prowess – this time in the burgeoning proptech industry. The property tycoons, David and Simon, have pocketed £2.1 billion after selling half their stake in Global Switch, an owner, operator and developer of large-scale carrier and cloud neutral data centre properties in Europe and Asia-Pacific.
They have sold a quarter of the proptech business to a consortium of mainly Chinese investors, including Jiangsu Sha, a privately owned Chinese steelmaker, and China Citic Bank, one of the country’s largest lenders, The Times reported. The deal comes in advance of a possible float of the data centre owner in London next year. Two years ago, the Reuben brothers banked £2.4 billion from the sale of a 49% stake in Global Switch, which they bought for £585 million in 2004.
The London-based proptech company has benefitted from a boom in the digital economy over the past decade, which has resulted in data centre operator profits soaring as demand for internet storage grows.
The investment is reportedly the most lucrative of the Reuben brothers’ career. David and Simon, born in Mumbai, came to Britain in the 1950s and invested in a variety of industries including carpets, metal and property. They made their fortune in Russian aluminium, controlling an estimated 5% of global production through their Trans-World Metals business. They left Russia in 2000, having made £1.3 billion, and began to buy up marquee properties, including the Millbank Tower and the John Lewis Partnership headquarters in Victoria.
Global Switch aims to go public next year with New York, London and Hong Kong competing for the £8 billion offering. The Reuben brothers now own 24.01% of the company. Established in 1998, its data centres are exclusively located in Tier 1 markets, which are key business and connectivity hubs, close to central business districts.
Global Switch acts as a partner for customers that require data centre capacity with 24/7 power and cooling, high levels of connectivity, security and sophisticated infrastructure and environmental monitoring to house their computer servers, network equipment and IT infrastructure.
The proptech company’s customers are global to national, large and small including government organisations, financial institutions, enterprises, cloud service providers, global systems integrators, telecommunication carriers, managed service providers and other hosting businesses. In 2014, Global Switch became the highest credit rated data centre company in the world, when Fitch gave the company an upgrade to its credit rating to BBB+ from BBB. Moody’s also upgraded its long term issuer rating for Global Switch to Baa2 from Baa3.
DMZ thinks the latest deal adds further weight to the Reuben brothers’ position as one of the top DealMakerz in the country. At the end of last year, the duo managed to sell 45 upmarket flats in Paddington in less than two months. They also announced plans to restore a £250 million former hotel near Piccadilly Circus, which they bought for just £100 million in 2012. This year they’ve snapped up Mayfair’s Iconic Burlington Arcade, New York’s answer to 5 Hertford Street, and a property on Pall Mall.