Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
The overall acquisition rate on a 100% basis is JPY190 billion ($1.55 billion), which reaches a 2.1% discount to the properties’ assessment of JPY194 billion, said the Reit supervisor in a Sept 1 bourse filing.
Keppel DC Reit and Keppel are collectively obtaining 90% efficient rate of interests in 2 property, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Keppel DC Reit said the acquisition will raise its distribution per unit immediately whilst also offering multiple avenues of long-term earnings development. The assets gain from acquired average annual lease escalation of regarding 2.8%, and the in-place rents are approximated to be a minimum of 30% below prevailing market rents.
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With the acquisition, Japan’s contribution to the Reit’s profile rental income increases to about 23%, from 9% as at end-June this year.
The weighted average lease expiry is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, claimed this broadens its network of institutional and functional partners, and strengthens its capability to source and get access to future investment prospects globally.
Keppel DC Reit will thus pay concerning JPY168.4 billion for its reliable interest in both data centres.
At the same time, the existing operator will maintain a 10% stake in each asset, to guarantee “placement of interests and operational continuity”, the bourse filing stated.
The Reit will take an 88.62% claim in each data centre, while Keppel, through its interest in Keppel Japan KK, will hold a 1.38% efficient interest.
Established in Inzai City, among Japan’s the majority of established hyperscale data-centre clusters, the two totally matched, colocation assets are completely inhabited by four investment-grade internet enterprise and IT companies clients.
3 of the four investment-grade clients across both Tokyo data centres are new to the Reit’s profile, which broadens its client base and minimizes client concentration risk.
Its manager plans to fund the acquisition with a mix of equity and yen-denominated debt. The deal is expected to be completed in the 4th quarter of this year.
