Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Keppel DC Reit said the acquisition will boost its distribution each instantly whilst also offering multiple avenues of long-term revenue growth. The assets gain from acquired average annual rent rise of regarding 2.8%, and the in-place rents are approximated to be at least 30% listed below prevailing industry rents.
With the acquisition, Japan’s contribution to the Reit’s profile rental income enhances to around 23%, from 9% as at end-June this year.
Keppel DC Reit and Keppel are jointly getting 90% efficient interests in two property, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Keppel DC Reit will certainly therefore pay concerning JPY168.4 billion for its reliable rate of interest in both information centres.
On the other hand, the existing operator will preserve a 10% risk in each asset, to assure “positioning of interests and working continuity”, the bourse filing mentioned.
The total purchase cost on a 100% basis is JPY190 billion ($1.55 billion), which reaches a 2.1% discount to the properties’ valuation of JPY194 billion, said the Reit manager in a Sept 1 bourse declaring.
Loh Hwee Long, CEO of the manager of Keppel DC Reit, said this broadens its network of institutional and functional partners, and strengthens its ability to source and gain access to future investment possibilities globally.
The Reit will take an 88.62% claim in each data centre, while Keppel, with its interest in Keppel Japan KK, will hold a 1.38% efficient interest.
The weighted average lease expiration is approximately 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Located in Inzai City, among Japan’s many developed hyperscale data-centre clusters, both fully matched, colocation properties are totally inhabited by four investment-grade internet venture and IT services clients.
3 of the 4 investment-grade clients throughout the two Tokyo information centres are updated to the Reit’s portfolio, which expands its client base and decreases client concentration risk.
Its manager intends to fund the procurement with a mix of equity and yen-denominated debt. The deal is expected to be completed in the 4th quarter of this year.
