On June 21, 2023, Allied Properties Real Estate Investment Trust (Allied) sold its urban-data-centre (UDC) portfolio in Downtown Toronto to KDDI Corporation for $1.35 billion, exceeding the IFRS net asset value by $118 million. This portfolio includes freehold interests in 151 Front Street West and 905 King Street West, and a leasehold interest in 250 Front Street West. Allied's portfolio, recognized for its high-density network and carrier-neutrality, supports a wide range of telecommunication, cloud, and content networks, making it a prominent data-centre portfolio in Canada.

KDDI, a leading Japanese telecommunications firm and Fortune Global 500 company, operates data centres globally via its subsidiary, Telehouse. Allied's Founder, Michael Emory, noted KDDI's suitability for this portfolio, mentioning plans for collaboration on the Union Centre site's development.

The sale process, initiated by Allied and managed by Scotiabank and CBRE Limited, involved contacting 97 potential buyers and culminated in final bids. The sale, expected to close by the third quarter's end, will see the proceeds used mainly to retire debt and fund Allied's development activities. This transaction will significantly increase Allied's taxable income for fiscal 2023, leading to a special distribution to Unitholders.

Advisors for this transaction included Scotiabank, CBRE, and Aird & Berlis LLP for Allied, and BofA Securities, Borden Ladner Gervais LLP, and Nishimura & Asahi for KDDI.