Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Three of the 4 investment-grade customers throughout the two Tokyo information facilities are new to the Reit’s profile, that expands its client base and decreases client concentration risk.
With the acquisition, Japan’s contribution to the Reit’s portfolio rental income enhances to about 23%, from 9% as at end-June this year.
Keppel DC Reit and Keppel are jointly acquiring 90% reliable rate of interests in 2 property, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Its manager intends to fund the purchase with a mix of equity and yen-denominated debt. The deal is expected to be completed in the 4th quarter of this year.
Established in Inzai City, one of Japan’s the majority of established hyperscale data-centre clusters, the two fully fitted, colocation possessions are fully occupied by four investment-grade internet enterprise and IT services clients.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, claimed this increases its network of institutional and functional partners, and strengthens its ability to source and get access to future investment prospects globally.
The weighted average rent expiry is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Keppel DC Reit said the procurement will raise its distribution each immediately while also offering several avenues of long-term earnings development. The properties gain from acquired average annual rent rise of about 2.8%, and the in-place rental fees are approximated to be at the very least 30% below dominating industry rents.
Keppel DC Reit will certainly thus pay about JPY168.4 billion for its efficient interest in the two information centres.
At the same time, the existing operator will keep a 10% risk in each asset, to guarantee “positioning of interests and working continuity”, the bourse filing said.
The Reit will take an 88.62% claim in each data center, whilst Keppel, through its interest in Keppel Japan KK, will hold a 1.38% reliable interest.
The total acquisition price on a 100% basis is JPY190 billion ($1.55 billion), that is at a 2.1% discount to the properties’ valuation of JPY194 billion, stated the Reit administrator in a Sept 1 bourse declaring.
