Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Keppel DC Reit and Keppel are jointly getting 90% effective interests in 2 property, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
With the acquisition, Japan’s contribution to the Reit’s account rental income enhances to about 23%, from 9% as at end-June this year.
The Reit will take an 88.62% claim in each data centre, whilst Keppel, with its interest in Keppel Japan KK, are going to hold a 1.38% efficient interest.
Keppel DC Reit said the purchase will raise its distribution per unit instantly whilst also offering multiple avenues of long-term revenue growth. The properties benefit from contracted average annual rent growth of concerning 2.8%, and the in-place leas are estimated to be a minimum of 30% below dominating market rents.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, stated this increases its network of institutional and functional partners, and enhances its ability to source and access future investment prospects globally.
Established in Inzai City, one of Japan’s a lot of developed hyperscale data-centre clusters, both completely matched, colocation possessions are fully inhabited by four investment-grade internet business and IT companies clients.
Keppel DC Reit will therefore pay about JPY168.4 billion for its efficient interest in both data hubs.
Meanwhile, the existing operator is going to maintain a 10% stake in each asset, to guarantee “placement of interests and operational continuity”, the bourse filing mentioned.
The weighted average lease expiry is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
The overall acquisition cost on a 100% basis is JPY190 billion ($1.55 billion), which reaches a 2.1% discount to the assets’ assessment of JPY194 billion, stated the Reit manager in a Sept 1 bourse filing.
3 of the 4 investment-grade customers throughout the two Tokyo information centres are new to the Reit’s profile, that broadens its client base and decreases client concentration risk.
Its manager prepares to fund the acquisition with a mix of equity and yen-denominated debt. The deal is expected to be finished in the fourth quarter of this year.
