Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Three of the 4 investment-grade clients across both Tokyo information facilities are updated to the Reit’s portfolio, which expands its client base and decreases client concentration risk.
Its manager plans to finance the procurement with a mix of equity and yen-denominated debt. The deal is expected to be finished in the 4th quarter of this year.
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Meanwhile, the existing operator is going to keep a 10% stake in each asset, to ensure “alignment of interests and working continuity”, the bourse filing mentioned.
With the purchase, Japan’s contribution to the Reit’s portfolio rental income enhances to about 23%, from 9% as at end-June this year.
The complete purchase cost on a 100% basis is JPY190 billion ($1.55 billion), that reaches a 2.1% discount to the assets’ valuation of JPY194 billion, stated the Reit manager in a Sept 1 bourse filing.
The Reit will take an 88.62% claim in each data center, whilst Keppel, through its interest in Keppel Japan KK, are going to hold a 1.38% effective interest.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, said this broadens its network of institutional and functional partners, and enhances its capability to source and get access to future investment possibilities internationally.
Keppel DC Reit said the acquisition will boost its distribution each immediately whilst also providing numerous channels of long-term earnings growth. The properties gain from acquired average annual rent escalation of concerning 2.8%, and the in-place rents are estimated to be a minimum of 30% below prevailing industry rents.
Keppel DC Reit will thus pay regarding JPY168.4 billion for its reliable rate of interest in the two data hubs.
Keppel DC Reit and Keppel are jointly acquiring 90% effective rate of interests in 2 freehold, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
The weighted average lease expiry is about 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Located in Inzai City, one of Japan’s a lot of established hyperscale data-centre clusters, both completely matched, colocation properties are totally occupied by four investment-grade internet business and IT companies clients.
